1. In 3-4 paragraphs: Explain the role that a company's future plays in the stock valuation process; develop a forecast of a stock's expected cash flow, starting with corporate sales and earnings, and then moving to expected dividends and share price?
2. If you bought a 2-year bond with a 7% annual coupon and a face value of $1,000 for a price of $1050, what is the bond’s yield to maturity?
3. Company X and Company Y are very similar in every dimension. Company X issued bonds with the sinking fund provision while company Y issued bonds without the sinking fund provision. Which company’s bond should offer lower yield?