A company has promised a dividend of $1.50. next year. The growth rate for the company is projected to be 1.5% annually. The beta of the company stock is 0.75. The market return is expected to be 6% and the risk free rate is 1.5% What should the fair price of the stock be?

Suppose that between the ages of 22 and

36​,

you contribute

​$9000

per year to a​ 401(k) and your employer contributes

​$4500

per year on your behalf. The interest rate is

7.9​%

compounded annually. What is the value of the​ 401(k) after

14

​years? b. Suppose that after

14

years of working for this​ firm, you move on to a new job.​ However, you keep your accumulated retirement funds in the​ 401(k). How much money will you have in the plan when you reach age​ 65? c. What is the difference between the amount of money you will have accumulated in the​ 401(k) and the amount you contributed to the​ plan?

a. The value of the​ 401(k) after

14

years is

​$nothing.

​(Do not round until the final answer. Then round to the nearest dollar as​ needed.)

b. The money accumulated in the plan when reaching age 65 is

​$nothing.

​(Do not round until the final answer. Then round to the nearest dollar as​ needed.)

c. The difference between the amount of money you will have accumulated in the​ 401(k) and the amount you contributed to the plan is

​$nothing.

​(Do not round until the final answer. Then round to the nearest dollar as​ needed.)

1)A stream of equal payments that occur at the beginning of each month for one year is called a(n) __________.

2) Your credit card charges interest of 1.2 percent per month. What is the annual percentage rate?

3)What type of loan is repaid in a single lump sum?

Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just​ completed, Grips earned ​$3.58 per share and paid cash dividends of ​$1.88 per share ​(​D0=$​1.88). ​Grips' earnings and dividends are expected to grow at ​35% per year for the next three​ years, after which they are expected to grow at ​8% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of ​15% on investments with risk characteristics similar to those of​ Grips?

1. You purchase a 10 year 12% semiannual bond with a YTM of 11% and a face value of $10,000. What is the value of the first payment you’ll receive from the bond?

A three-year bond has a coupon rate of 8% and is priced at $950.26. The face value is $1,000 and the bond pays annual coupons.

Calculate the realized (annualized) compound YTM on the bond if the one-year interest rate (with certainty) over the next three years will be, r1 = 8%, r2 = 10%, and r3 = 12%. You buy the bond today and hold it until maturity.

[Note: Assuming today is t = 0 and t = 1 is one year from today, r1 represents the interest rate for the period, t = 0 to t = 1. Similarly, r2 represents the interest rate for the period, t = 1 to t = 2, and r3 represents the interest rate for the period t = 2 to t = 3.]

A 5 year semiannual coupon bond with a face value of $1,000 trades at $938. The market-determined discount rate is 9%. What is the coupon rate? Answer in percent and round to two decimal places.

Lucy Anders wishes to save $700 at the end of each year for the first four years. At the end of each of the fifth ,sixth, and seventh years, she wishes to save $625. Find the future value of this cash flow at the end of the seventh year if the interest rate is 4.7% compounded annually.

2. a) Calculate the IRR of the following cash flows: -$550,000 in year 0; $430,000 in year 1; $100,000 in year 2; and $200,000 in year 3. Is the project acceptable if the cost of capital is 10%?

b) Now calculate the MIRR of the same cash flows assuming a reinvestment rate of 12%. Is the project acceptable or not acceptable under this methodology?