1. XYZ Co has a dividend payout ratio of 25% (which means it has a retention ratio of 75%) If Return on Earnings is 6%, what is the expected growth rate for dividends?
2. Discuss the construct of the time value of money and how it relates to investing.
3. A bond with 14 years to maturity paying a 4% coupon is selling to yield 5.5%. Calculate the bond's duration when yields to maturity change by 50bp, the bond's convexity and the % change in the bond's price.