1. Early 2019 the Indonesian government issued serial Government Securities 005 or Retail Saving Bond (SBR) 005, the coupon rate is 8.15%. In the same year the Government Indonesia also issued Indonesian Retail Government Bonds (ORI) series 016 with a coupon rate of 6.8%. Minimum purchase of IDR 1,000,000 (same as SBR 005). The maturity period for ORI series 016 is the same as SBR 005 is 3 years. A. Explain the difference between the two based on (i) the coupon interest rate and (ii) the possible capital gain obtained? B. Which do you think is more attractive?

2. Deva Corp. just issued its shares 2 years ago and is about to start distributing dividends next year. The first dividend is IDR 500 per share. In the year of Next dividend will grow 12%, then in the following year dividends will grow 6% each year forever. If the rate of return desired by investors is 12%,

a. What is the Present Value (P0) of the stock the company?

B. How much is the Dividend Yield at the beginning of the first year (DY1) of the shares issued?