1. Assume that you purchase a 10-year P1,000 par value bond, with a 12% coupon, and a yield of10%. Interest is paid annually. Immediately after you purchase the bond, yields increase to 11% and remain at that level to maturity. If you hold the bond for 5 years and then sell at its market value, calculate the realized horizon yield (from years 1 to 5).

2. . Jans Company just paid dividends amounting to P1.50, and the dividend is expected to grow at a constant rate of 6%. What is the price of the stock assuming a 12% required return?

3. A stock is currently selling at P25, and the next dividend is P5.50. It is also expected that the dividend will grow at constant rate of 8%. Compute :

a. The expected rate of return

b. The dividend yield on the stock

c. The expected price of this stock 5 years from now assuming there will be no changes in the market that could affect dividends and its growth.

4. A company just paid a P1.75 dividend, and it is expected to grow at 25% every year for the next 3 years. After 3 years the dividend is expected to grow at the rate of 5% indefinitely. If the required return is 12%, what is the value of the stock today/

5. A 10% preferred stock have a par value of P50. Determine the value of the preferred stock if the current market rate is 12%..

6. A firms estimated a future free cash flows follows:

Year	0	1	2	3
FCF	1,000,000	1,500,000	1,800,000	2,000,000

Given a long-run g_FCF of 6% after the third year and a weighted average cost of 10%:

Required:

a. Compute the firms intrinsic value

b. If the firm has P5 million in debt, P5 million preferred stock equity, and has 1,000,000 shares of common stock, what is the firms intrinsic value per share?