1. A stock’s last dividend was $3.05 per share and the dividends are expected to grow 25% per year for three years. Thereafter, the dividends are expected to grow at a constant rate of 6.5% per year. If investors require a return of 12.8% per year to hold the stock, what is the stock’s intrinsic value per share?

1) $78.63

2) $86.73

3) $91.86

4) $72.20

5) $81.47

2. A zero-coupon bond has a $1,000 par value and its price is $491.79. If its yield to maturity is 5.2% per year, in how many years does the bond mature?

1) 11

2) 14

3) 12

4) 10

5) 13