1) Suppose a company will be in business for only the next 10 years and pays an annual dividend of $1.75 for those ten years? What is the present value of a share of stock for this company if we want a 9% return on the stock?
2) Your firm has issued 15- year zero coupon bonds with a $1000 face value. If the bonds are currently selling for $585, what is the annual yield to maturity, assuming semiannual compounding?