1. A 10-year bond pays semiannual payments, and has par value of $1,000. The total annual coupon is $70. If the market rate of interest for this bond moves to 5% exactly one year after issue, what would the market price be for the bond?
2. You are forecasting a stock to pay the following dividends:
$2.15 , $5.65 , $4.
The dividends will then begin declining at a rate of 5.0% for the foreseeable future. What is the intrinsic value of this stock if the required return is 14%?