1. Hugo plans to make quarterly deposits of $60 (beginning one quarter from today) to a savings account that pays 12% interest compounded annually. Which of the following answers would provide the balance of John’s savings account after 3 years (i.e., after his 12th $60 deposit)?
a) FW=60(F/A,12%,12) where FW = Future Worth
b) FW=60(F/A,12%/4,3)
c) FW=60(4)(F/A,12%/4,36)
d) FW=60(4)(F/A,12%,3)
2. River Rock INC. just paid a divident of 2.60. The company has increased its dividend by 2.8% a year for the past 10 years and expects to continue doing so. What will a share of this stock be worth 6 years from now if the required return rate is 15 percent?
A. 23.89 B. 24.65 C. 25.15 D. 25.86 E. 26.90