Instructions:$$Please show your work for each question and clearly mark your final answer. You are permitted to discuss these questions with fellow students, but all answers must be your own. Please submit answers via Canvas.

Question #$1$: Investment X offers to pay you $$4,500$ per year for nine years, whereas Investment Y offers to pay you $$7,000$ per year for $5$ years. Which of these cash flow streams has the higher present value if the discount rate is $5\%?$ Does your answer change if the discount rate is $22\%?$ Clarify why this change does or does not occur.

Question #$2$: One of your customers is delinquent on his accounts payable balance. You$$ve mutually agreed to a repayment schedule of $$700$ per month. You will charge $1\mathrm{.}3\%$ per month interest on the overdue balance. If the current balance is $$21,500,$ how long will it take for the account to be paid off?

Question #$3$: You have purchased your dream home, agreeing to pay the bank $$2,500$ each month for a span of $30$ years. The quoted interest rate is $6\%$ APR, compounded monthly. After $12$ years $($immediately following your $144$th payment$),$ you inherit a substantial estate and wish to pay off the remaining principal on this mortgage. How much do you still owe?

Question #$4$: A German bond that pays annual coupons of $4\mathrm{.}5\%,$ has a par value of $1,000,$ and a YTM of $3\mathrm{.}9\%.$ Assuming there are $19$ years until maturity, what is the current price of this bond?

Question #$5$: What is the duration of a $5$ year, $8\%$ semi$-$annual coupon bond with a face value of $$1,000$ that is currently selling at a YTM of $10\%?$

Question #$6$: The Starr Co$.$ just paid a dividend of $$\mathrm{.}215$ per share on its stock. The dividends are expected to grow at a constant rate of $5\%$ per year, indefinitely. If investors require a return of $11\%$ on their stock, what is the current price? What will be the price is three years?

Question #$7$: The next dividend payment by ECY, Inc. will be $$3\mathrm{.}20$ per share. The dividends are anticipated to maintain a growth rate of $6\%,$ forever. If ECY stock currently sells for $$63\mathrm{.}50$ per share, what is the required return?

Question #$8$: Gruber Corp. pays a constant $$9$ dividend on its stock. The company will maintain this dividends for the next $12$ years and will then cease paying dividends forever $($you should assume the company disappears with no extra payouts$).$ If the required return on this stock is $10\%,$ what is the current share price?