Question 1: Aldebaran Investments is expected to pay a dividend of $2.50 per share for the next 10 years. From Year 11 onwards, it should pay a dividend of $3.00 per share. What is the fair price for Aldebaran's shares, if its shareholder require a return of 8% p.a.

Question 2: True Natural Remedies (TNR) Pty. is sells vitamins and other health products. The company just paid a dividend of $0.50 per share and the dividend is expected to grow at a rate of 3% p.a. for the next 5 years. Thereafter, it is expected to grow at a rate of 1% p.a., in perpetuity. At what price should TNR's shares be trading, if its shareholders require a return of 8% p.a.?

Question 3: A charitable foundation plans to award a scholarship of $50,000 per year to a deserving student, in perpetuity. The first scholarship payment will be made 5 years from now. To fund its plan, the foundation has asked its backers to commit to an annual donation at the end of each year, for the next 5 years. What should the size of the annual donation be, if the money will be invested in an account that delivers a return of 5% p.a.?

Question 4: Intrepid Adventures Pty is considering an IPO, and you have been hired to advise the firm's owners on an appropriate listing price for its shares. The firm is expected to pay its first dividend of $1.50 per share in 5 years' time.It should then pay dividends of $2.00 and $2.50 per share in the following two years. Thereafter, the dividend is expected to grow at 1.5% p.a. in perpetuity. At what price would you advise the owners of the firm to issue the shares, assuming a required rate of return of 8% p.a.?

Question 5: You have taken out a 5-year loan to finance the purchase of a $120,000 motor vehicle. The loan requires you to make equal monthly repayments of $2,000 for the first 59 months and a final ballon payment at the end of the 60th month. What is the final balloon payment, if the loan rate is 6% p.a. with monthly compounding?