1. As part of your pension, you will receive $3,500 at the end of each month for the next 20 years starting next month. If you can invest these funds at an interest rate of 3.6% compounded annually, how much is your pension worth today?
2. Mitre Inc would like to finance a new expansion by issuing a new common stock. The corporation existing common stock currently sells for $24.50. Management believe that they can issue new common stock at this price, incurring flotation cost of 4% of current market price. What is the stocks net market price (net proceeds)?