XYZ Corporation is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 18% during the next two years, at 15% in the 3rd year, and at a constant rate of 6% thereafter. XYZ's last dividend was $1.15, and the required rate of return on its stock is 13%. Dividends are paid at the end of each year. Required:

a. Calculate the price of a share today.

b. Calculate P1(stock price in one year) and P2 (stock price in two years).

c. Calculate the expected dividend yield, capital gains yield, and total yield for years 1, 2, and 3.

Franklin painting company is considering whether to purchase a new spray paint machine that costs $4,800. the machine is expected to save labor, increasing net income by $720 per year. the effective life of the machine is 15 years according to the manufacturer’s estimate. required determine the unadjusted rate of return based on the average cost of the investment.

Quantitative problem: you need $20,000 to purchase a used car. your wealthy uncle is willing to lend you the money as an amortized loan. he would like you to make annual payments for 4 years, with the first payment to be made one year from today. he requires a 8% annual return. what will be your annual loan payments? round your answer to the nearest cent. do not round intermediate calculations. $ how much of your first payment will be applied to interest and to principal repayment? round your answer to the nearest cent. do not round intermediate calculations. interest: $ principal repayment

In the fall of 2008, aig, the largest insurance company in the world at the time, was at risk of defaulting due to the severity of the global financial crisis. as a result, the u.s. government stepped in to support aig with large capital injections and an ownership stake. how would this affect, if at all, the yield and risk premium on aig corporate debt?