Q.1 : A stock is expected to pay its first $320 dividend in 1 year from now. The dividend is expected to be paid annually forever and grow by 4% pa. The discount rate is 5% pa. Estimate the current stock price. The current stock price should be:

Question 5Select one:

a.

$32,319.99

b.

$31,999.99

c.

$30,476.19

d.

$8,000

e.

$5,804.99 Q.2 : Find the present value of 4 annual payments of $40 per annum where the first payment is made 1 year from now. So there are 4 annual payments from t=1 to t=4 inclusive. The discount rate is 13% pa. The present value of these payments is:

Question 6Select one:

a.

$15.47

b.

$118.98

c.

$140.69

d.

$188.71

e.

$307.69