1. Tyler Industries recently paid the annual common stock dividend of $2.00. The dividend amount is projected to grow at the annual rate of 30 percent for the next 2 years. Starting in the third year, the growth rate is expected to stay constant at the annual rate of 5 percent for the foreseeable future. If the required rate of return is 15 percent, what is the value of this stock?

$37.12

$31.65

$33.74

$35.68

$39.56

2. You purchased a 12-year Treasury bond with a 7 percent coupon rate. The bond’s asked yield is currently 5.5 percent. The settlement of the purchase occurred 20 days after the last coupon payment and there are 160 days before the next. If the bond has a par value of $1,000 and interest is paid semiannually. What is the full price of the bond that you pay to the seller?

$1,090.21

$1,134.40

$1,144.12

$1,121.30

$1,130.51