The current interest rates are 8%. Bill want to buy a long-term bond with a face value of $1000 that pays a coupon rate of 6%. Which of the following prices is most feasible?

• $888.88
• $1,000.00
• $1,111.11
• Not enough information to solve

Wally Corp is planning to pay a dividend of $1.32. The growth rate of earnings and dividends is expected to be 10% for the foreseeable future. If the investors required rate of return is 13.5%, how much should the stock be worth?

• $13.20
• $36.71
• $42.81
• $41.49
• None of the above