1. Theodore D. Kat is applying to his credit union for a mortgage of $200,000. The bank...
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1. Theodore D. Kat is applying to his credit union for a mortgage of $200,000. The bank has quoted 8% an interest rate, compounded semi-annually. He would pay off the mortgage over 25-years (amortization period) and make a payment at the end of each month.
a. Calculate EAR (1/100 of one percent, no %, e.g. 9.35)
b. How much are Theodore’s monthly payments?
2. Genu corporation is expected to pay a dividend of $2 per share next year. The annual dividend will rise by 6% per year forever. The required rate of return is 11%. What is the price of stock today? (nearest dollar without dollar sign ($) or comma, e.g. 15000)
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