1.) Consider the following information .How many shares do you hold today if you bought 1,000 shares of this stock at the beginning of 1985?

1986-10 percent stock dividend

1987-10 percent stock dividend

1988-25 percent stock dividend

1989-100 percent stock dividend

1994-2 for 1 stock split

1994-2 for 1 stock split

2007-100 percent stock dividend

2.) Ten years ago a stock paid a $0.30 dividend. Since then it has split 2 for 1 twice. The current dividend is $ 0.16.If you have a required rate of return of 14 percent ,what is the most you can pay for this stock?

3.) Ten years ago a stock paid $ 0.40 dividend. Since then it has a split 3 for 1.The current dividend is $ 0.18.If you have a required rate of return of 15 percent, what is the most you can pay for the stock?

4.) A stock split sells for $ 40.23 and currently pays a $ 0.55 dividend. If the market expects a 13 percent rate of return of this stock, what dividend growth rate do these figures imply.?

Assume that all bonds are $ 1,000 par value.

5.) A person buys a five year ,$1,000 certificate of deposit that carries a nominal rate of 9 percent, compounded semiannually. Six months after this purchase a 4 ½ year CD at the same bank offers a 9.5 percent annual rate, also compounded semiannually. How much difference is there in total interest paid by the two competing investments?

6.) A seven-year bond with an 8 percent coupon rate has a yield to maturity of 9.15 percent. What is the current bond price?

7.) Calculate the duration of the bond in Problem 2 using the following methods.

a.)The traditional method

b.)The closed form method

8.) A zero coupon bond matures in eight years and sells for $500.

a.)Without doing any calculations, estimate its yield to maturity

b.)Calculate the exact yield to maturity.

**Subject Business Finance**