Reference no: EM132467281

Question 1: Riverhawk Sport Authority (RSA) will pay a dividend of $7 for each of the next 3 years, $8 for each of the years 4-6, $9 for each of the years 7-9, and a dividend of $10 for year 10. Thereafter, the company will pay no dividends. If you require 13 percent rate of return on investments in this risk class, how much is this stock worth to you?

A.$39.35

B.$41.00

C.$42.77

D.$46.68

E.$44.66

F.$37.80

Question 2: Riverhawk Corporation has a bond outstanding with a market price of $1,300.00. The bond has 10 years to maturity, pays interest semiannually, and has a yield to maturity of 9%. What is the bond's coupon rate?

A.9.77%

B.10.54%

C.13.61%

D.12.08%

E.12.84%

F.11.31%

Question 3: The last dividend on Riverhawk Corporation's common stock was $4.00, and the expected constant growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock?

A.$ 55.00

B.$ 60.50

C.$ 49.50

D.$ 33.00

E.$ 38.50

F.$ 44.00