Calculate the current price of the stock

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1. A stock's next expected dividend is $10 one year from now. Ater that, the dividends are expected to grow by X% per year indefinitely. The current stock price is $333.33. The investor's required return is 5%. Determine X.

2. A company's net income is $25,000,000. It has 1.5 million shares outstanding and its price-to-earnings ratio is 12.1. Calculate the current price of the stock.

3. The modified duration of an 8-year bond is 5.35 and its convexity is 39.19. Estimate the percentage change in the price of the bond if its yield increases by 63 basis points (i.e. the yield increases from i to i+0.63%).

Reference no: EM131924061

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