1. A treasury bond that matures in 10 years has a yield of 2.3%. A 10-year corporate bond has a yield of 7.6% and a liquidity premium of 1.2%. What is the default risk premium of the corporate bond?

None of the other answers

11.10%

8.70%

4.10%

6.50%

2. How much are you willing to pay for a 6% annual coupon bond with a 4.5% yield, which comes due in 12 years?

$2,623.72

None of these

$874.24

$1,136.78

$759.15

3. A stock is expected to pay a dividend of $2.00 each year for the next 3 years, after that the dividend is expected to grow at a constant rate of 7% per year forever. The stock s required rate of return is 10%. What is intrinsic value of the stock today?

$53.70

None of these

$58.57

$71.33

$21.05