More than the answers, I need to know to solve these questions, step-by-step. These are practice questions for an upcoming exam. Thank you!
Questions 1. AMT stock just paid a quarterly dividend of $1.62 per share (d0 = 1.62). AMT's dividends are expected to grow at a rate of 4% APR compounded quarterly over the next 8 years, and then remain constant (zero-growth) forever after that point in time. Using the dividend discount model, what is the price of the stock today if the required return is 12% APR compounded quarterly? 2. Bank JPX is offering personal loans of $30,000 to be repaid over 6 years with payments of $625 per month. The first loan payment occurs one month after borrowing the $30,000. What effective annual rate (EAR) are they charging on this loan? 3. The ZLC consulting firm just signed an agreement to provide services to another firm. In doing so, ZLC will receive $100,000 today, and then annual payments of$90,000 per year for 5 years, with first annual payment starting one year from today. What is the present value of this agreement if the appropriate discount rate is 9.00%compounded annually? 4. You are considering the purchase of a $1000 par value bond issued by ZLY Corporation. The bond has exactly 10 years remaining to maturity, and pays a semi-annual coupon at a rate of 9% APR compounded semi-annually. The next coupon will be paid 6 months from today. What should be the price of the bond if the stated yield-to-maturity is 11% APR compounded semi-annually? 5. Exactly 3 years ago, you bought a bond for $925. You just received your 6th coupon payment of $30, and you then immediately sold the bond for $870. What was your realized yield on this investment, stated as an effective annual rate (EAR)? 6. What is the present value of $10,000 that is to be received in 10 years, if the discount rate is 6% APR compounded annually? 7. ZLX Inc issued a zero-coupon bond. What is the price today of its $1000 par-value zero-coupon bond that matures in 5 years, if the yield to maturity is 4.00% APR compounded annually? 8. As an independent consultant, you just booked a client for $1,100 per month, with the first payment due 1 month from today. What is the present value of your booking if the payments are contracted to last for 72 months, and the discount rate is 6.6% APR compounded monthly? 9. CTY Inc just made a deposit of $1.5 million in an account expected to earn 9.6% APR compounded monthly. What will be the value of this single deposit in 7 years? 10. Firm ZLC will be receiving payments of $10,000 per month for consulting services, with first payment arriving 1 month from today. What is the future value of these monthly payments 3 years from today, if the payments are deposited in an account yielding 3.84% APR compounded monthly?