Q1.1 Thirsty Cactus Corp. just paid a dividend of $1.45 per share. The dividends are expected to grow at 35 percent for the next 9 years and then level off to a 8 percent growth rate indefinitelyIf the required return is 12 percent, what is the price of the stock today

Q1.2 Which one of the following relationships is stated correctly?

A: The call price must equal the par value.

B: An increase in market rates increases the market price of a bond.

C: The coupon rate exceeds the current yield when a bond sells at a discount.B: An increase in market rates increases the market price of a bond.

D: Decreasing the time to maturity increases the price of a discount bond, all else constant.

E: increasing the coupon rate decreases the current yield, all else constant.

Q1.3 Suppose you know a company's stock currently sells for $80 per share and the required return on the stock is 10 percent. Do you also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield? If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

Q1.4 Far Side Corporation is expected to pay the following dividends over the next four years: $10, $9, $5, and $1. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever If the required return on the stock is 12 percent, what is the current share price?

Q1.5 You purchase a bond with an invoice price of $1,319. The bond has a coupon rate of 6.25 percent, a face value of $1,000, and there are two months to the next semiannual coupon date. What is the clean price of this bond?