1) William purchases a $1000 par value 15-year bond with 7% annual coupons

1) William purchases a $1000 par value 15-year bond with 7% annual coupons. The redemption value is equal to the par value. William bought the bond at a premium to yield 3% effective.

Determine the write down or the amount for amortization of the premium in the 7th coupon payment.

2) Holmgren Hotels' stock has a required return of 11 percent. The stock currently pays a dividend of $1.00 per share. The dividend is expected to stay the same for two years. After two years, the dividend is expected to grow at a rate of 7 percent forever. What should be Holmgren's stock price today?