How much will you pay for the company stock today

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1. Staal Corporation will pay a $3.40 per share dividend next year. The company pledges to increase its dividend by 4.5 percent per year indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock today? (Round your answer to 2 decimal places. (e.g., 32.16))

2. What is the duration of a 20 year Treasury with a 2% coupon and a YTM of 2% and face value = $100,000? If rates fall 150bp, what is your estimate of the dollar change in value?

 

Reference no: EM132000773

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