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What is the value of the stock today for thomas corporation

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Problem 1: Investors expect Thomas Corporation to begin paying dividends. The company should grow at a constant rate of 8 percent per year up to infinity. If the required rate of return is 12 percent, what is the value of the stock today? (Note that the last dividend paid equal $1.50).

Select one:

a. $40.5
b. $45.4
c. $37.5
d. $33.20

Problem 2: Suppose you are looking at a bond that has a 15% annual coupon. There are 20 years to maturity and the yield to maturity is 8%. What is the price of this bond?

Select one:

a. $898.93
b. $975.25
c. $1687.27
d. $1000

Reference no: EM132776869

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