1. Into Eternity Co. plans to pay a dividend of $3 per share next year. If the expected long-run growth rate of the dividends is 5% per year and the required rate of return is 11%, what is the stock price per share today?
2. Which of the following statements is most FALSE?
A.The “clean price” of a bond is different from the actual cash price.
B. Investment grade bonds are bonds rated at least BB by S&P or Ba by Moody’s.
C. All else equal, a callable bond would have a higher required return than a non-callable bond.
D. Market expectations of interest rates affect the shape of the yield curve.