1. Soul Enterprises recently paid a dividend, D0, of $1. It expects to have non constant growth of 10% for 3 years followed by a constant rate of 6% thereafter. The firm’s required rate of return is 11%. What is the intrinsic value of the stock today?
2. Consider a TIPS issued on 15 January 2006, with coupon of 3.625% and a maturity date of 15 January 2016. The base CPI-U level for the bond is the one registered in October 2006 and its value is 150.30. Assume that the CPI for October 2015, the "reference CPI" computing January 2016 cash ows, is 160.5. Using these values, what is a) the nal coupon payment and b) the principal repayment per $100 face value at maturity?