1. You own a house that you rent for $1,650 per month. The maintenance expenses on the house average $310 per month. The house cost $241,000 when you purchased it 4 years ago. A recent appraisal on the house valued it at $263,000. If you sell the house you will incur $21,040 in real estate fees. The annual property taxes are $3,600. You are deciding whether to sell the house or convert it for your own use as a professional office. What value should you place on this house when analyzing the option of using it as a professional office?

$0

$263,000

$236,400

$241,000

$241,960

2. The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 19 percent a year for the next 4 years and then decreasing the growth rate to 3 percent per year. The company just paid its annual dividend in the amount of $2.60 per share. What is the current value of one share of this stock if the required rate of return is 8.10 percent?

$107.90

$105.30

$93.01

$90.41

$77.11