King Gnu Inc.’s first quarterly dividend of $2 per share is expected to be paid 6 months from today. From then on, dividends will grow by 2% per quarter for three years (for 12 quarters following the first payment). After three years, the dividends will start declining by 1% per quarter in perpetuity. Assume that King Gnu Inc.’s required rate of return is 15% (Effective semi-annual rate). What is the price of a share of King Gnu Inc.’s today?

The present value (t=0) of the following cash flow stream is $3,569.17 when discounted at 7.25% compounded quarterly: 0.5x at the end of year 1, $412 at the end of year 2, 2.4x at the end of year 3, and $175 at the end of year 4. Assume this pattern of payments will continue in perpetuity (every 4 years). What is the value of the missing cash flows (x)?

Onitsuka Tiger (オニツカタイガー) just paid a dividend of $3.50 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a 14 percent return on the stock for the first three years. A 12 percent return for the next three years, and a 10 percent return thereafter. What is the current share price?

Your friends, Lee and Kuan, are struggling to solve for the missing cash flows of the following cash flow stream:

In fact, they're convinced that "x" must be $115.16. Note that the present value of the above cash stream with annual payments is $5,095.00, and the discount rate is 8.9411% compounded 365 time(s) per year.

Fuji TV (フジテレビ) issues bonds with an 8% coupon rate and $1000 face value. Interest is paid semi-annually, and the bond has 25 years to maturity. However, the bond does not pay the first eight coupon payments and instead makes half of these payments at maturity. If investors require an 7.80% return, what is the bond’s value?

Your 6-year-old wants to go to Princeton for Med School. This will cost you $120,000 per year for 6 years. On her next birthday you start putting money into an account paying 8% annually and continue to deposit the same amount every year until her 17th birthday.

Onitsuka Tiger (オニツカタイガー) is expecting a period of intense growth, so it has decided to retain more of its earnings to help finance that growth. As a result, it is going to reduce its annual dividend by 10% a year for the next three years.

Your job pays you at the end of the year and today, December 31, you just received your salary of $125,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 20% of your annual salary in an account that will earn 4.5% per year.

Fuji TV (フジテレビ) issues bonds with a $1,000 face value and a 20-year maturity. The bond makes semi-annual coupon payments of $60 each until the end of year 10. After that, the bond makes semi-annual coupon payments of $90 each until maturity.