2. SWR Corp. is expected to initiate quarterly dividend of $15 at the end of this quarter. Equity analysts expect this dividend to grow at 2% per quarter forever. If the required rate of return is 15% per year, what is the fair price of the stock?

1. $100.00
2. $214.29
3. $500.00
4. $857.14
5. $1,000.00

3. Consider a firm with a contract to sell an asset for $200,000 four years from now. The asset costs $120,000 to produce today. Given a relevant discount rate on this asset of 12% per year, calculate the profit the firm will make on this asset.

1. $7,004
2. $7,104
3. $7,204
4. $7,304
5. $7,404

4. The Neighborhood Bank wants to earn an effective annual return on its consumer loans of 11.50% per year. The bank uses daily compounding. What rate is the bank most apt to quote on these loans?

1. 10.87%
2. 10.89%
3. 10.91%
4. 10.93%
5. 10.95%

5. Beginning three months from now, you want to be able to withdraw $1,500 each quarter from your bank account to cover college expenses. The account pays 0.30% interest per quarter. How much do you need to have in your account today to meet your expense needs over the next four years?

1. $23,398.86
2. $23,597.52
3. $23,982.12
4. $24,165.43
5. $24,065.09