1) Pharmecology is about to pay the dividend of= $1.60 per share. It is a mature company, but future EPS and dividends are expected to increase with inflation, that is predicted at 4.00% per year. Nominal cost of capital is= 10.75%.

a) What is Pharmecology’s present stock price?

2) A series of US Treasury Bonds has maturities of 1, 2, 5, 10, and 30 years. Every bond makes semi-annual interest payment of= $50 and has the price of $1,060.00. In excel, calculate interest rate for each bond. In excel, sketch the yield curve for this series of bonds.

3) If difference seen in sample results is "statistically significant" it means that:

a) There is significant difference in sample results
b) There is an significant difference in the population
c) The difference observed in the sample was unlikely to have occurred if there is no difference in the population.
d) There is important difference in population that was not reflected in sample results.