The last dividend paid by Klein Company was $1.6.  Klein’s growth rate is expected to be  a constant 6 percent for 2 years, after which dividends are expected to grow at a rate  of 4 percent forever.  Klein’s required rate of return on equity (rs) is 13.9 percent.   What is the current price of Klein’s common stock? 

You intend to purchase a 17-year, $1,000 face value bond that pays interest of $48 every every 6 months.  If your nominal annual required rate of return is 9.7 percent with semiannual compounding, how much should you be willing to pay for this bond?

Which of the following is not a stock market index?

A 12-year bond with a par value of $1,000 has a 14.7 percent annual coupon. The bond  currently sells for $886.  If the bond’s yield to maturity remains at its current rate,  what will be the price of the bond 2 years from now?

Womack Toy Company’s stock is currently trading at $60 per share.  The stock’s dividend  is projected to increase at a constant rate of 8.2 percent per year.  The required rate of  return on the stock, rs, is 12.4 percent.  What is the expected price of the stock 9 years  from today?

A stock with a required rate of return of 13 percent sells for $28 per share. The stock’s  dividend is expected to grow at a constant rate of 3.6 percent per year. What is the  expected year-end dividend, D1, on the stock?

Which of the following bond prices is most sensitive to changes in interest rates?

A 21-year bond with a par value of $1,000 has a 5.7 percent annual coupon. The bond  currently sells for $842.  If the bond’s yield to maturity remains at its current rate,  what will be the price of the bond 3 years from now?

A share of preferred stock pays a quarterly dividend of $3.8.  If the price of this preferred  stock is currently $149, what is the nominal annual rate of return?

A share of preferred stock pays a quarterly dividend of $1.5.  If the price of this preferred  stock is currently $42, what is the nominal annual rate of return?