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sir I can solve these questions.. II. CALCULATIONS AND EXPLANATIONS. Compute the numbers and provide explanations when necessary. 1. Suppose we are considering investing in

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sir I can solve these questions..

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II. CALCULATIONS AND EXPLANATIONS. Compute the numbers and provide explanations when necessary. 1. Suppose we are considering investing in a stock priced as $ 55 per share today. We know that it will bring $ 1 dividend every year and can be sold out as $ 65 per share 5 years later. Assume the interest rate is constant at 5% every year. Calculate the present value of the stock, is this stock overvalued or undervalued? Show your work. 2. Suppose GM has a new project that would cost $11 million today and yield a payoff of $20 million in 6 years. a. should GM undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent? b. Can you figure out the exact cutoff for the interest rate between profitability and non- profitability of this project

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