1. The stock of Supergro Inc. is expected to grow at an annual rate of 28% for the next 2 years, after which growth will return to the normal constant growth rate of 8%. If the last dividend paid (that is, D0) was $2.00 and the required rate of return on stocks of this risk class is 16%, what is the price of the stock today?

2. Eight years ago, Camerson and Co. issued 25-year coupon bonds. The yield to maturity at the time of issuance was 8 percent and the bonds sold at 110% of par value. The bonds are currently selling at par value. What is the current yield to maturity for these bonds? [Assume that the coupon is paid annually]. (Round your answer to 2 decimal places and record as a percent but without a percent sign. For example, record 18.3893 8.56 % as 18.39).

3. Which of the following statements is most correct?

A.The constant growth model takes into consideration the capital gains earned on a stock.

B,It is appropriate to use the constant growth model to estimate stock value even if the growth rate never becomes constant.

C. Two firms with the same dividend and growth rate must also have the same stock price.

D. Statements a and c are correct.

E. All of the statements above are correct.