Question 1

Reed Corp. has a $2,000 par value bond outstanding with a coupon

rate of 5.5 percent paid semiannually and 18 years to maturity. The yield to

maturity of the bond is 6.2 percent. What is the dollar price of the

bond?

Round to the nearest cent and format as "X,XXX.XX"

Question 2

It was reported last week that Blue Bell Enterprises earned

$18.5 million this year. The report also stated that the firm's return on

equity is 11 percent. The firm retains 80 percent of its earnings. What will

next year's earnings be?

Round to the nearest whole dollar and format as

"XX,XXX,XXX"

Question 3

LMNO Company uses a required expected return of 14 percent. Because the dividend expected to be received in one year is $2 and the expected growth rate of dividends is 10%, the dividend expected to be received in two years from now,D_2,is $2.20. Based on the dividend growth model, what is the expected stock price one year from now?

Round to the nearest dollar and format as "XX"