The price of bill today is closest

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1. The ordinary shares of OLO Ltd are expected to pay a dividend of $1.00 at the end of year 1 and market analysts expect the dividend to grow at 15% p.a. for the next three years before the growth rate drops to 5% p.a. for the forseeable future. If the expected return on these shares is 15% their price today is closest to:

a) $9.10

b) $12.60

c) $14.10

d) $16.00

2. Ninety days ago, you purchased a 180-day treasury bill with a face value of $100,000. At that time, the yield to maturity on the bill was 6.0% p.a. The current yield to maturity on the bill is 5.0% p.a. The price of the bill today is closest to:

a) $97,126

b) $97,594

c) $98,542

d) $98,782

Reference no: EM132009471

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