1. The real risk-free rate is 2%, and inflation is expected to be 4% for the next 2 years. A 2-year Treasury security yields 7.0%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

2. Renfro Rentals has issued bonds that have a 9% coupon rate, payable semiannually. The bonds mature in 7 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? Round your answer to the nearest cent.

3. Boehm Incorporated is expected to pay a $3.80 per share dividend at the end of this year (i.e., D₁ = $3.80). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, r_s, is 12%. What is the estimated value per share of Boehm's stock? Do not round intermediate calculations. Round your answer to the nearest cent.