1. Suppose Nogro Corp's earnings per share is $2.00 in 2022 , on which it plans to pay dividends of $1.60 per share. Earnings are expected to grow 2%,6%,5% and 3% from 2023 to 2026 , during which period the dividend payout ratio is expected to remain unchanged. After 2026, the earning growth rate is assumed to drop to 0% and the payout ratio will increase to 100%. The risk-free rate of return is 2%, the market risk premium is 7%, and the stock of Nogro has a beta coefficient of 1.2. (a) What is the intrinsic value of a share of Nogro Corp's stock at the beginning of 2023 according to the dividend discount model? (b) If the market price of Nogro stock is $16 at the beginning of 2023, and you expect the market price to be equal to the intrinsic value at the end of 2023 , what is your expected 1-year holding period return? 3. Assume you have a 6 months investment horizon and are trying to choose between two bonds. Bond A has an 8% coupon rate and matures in 10 years. Bond B has a 10% coupon rate and matures in 15 years. Both bonds pay coupons twice a year. (a) If both bonds are now priced at 9% yield to maturity, what are their prices? (b) If you expect their yields to maturity to be 8.7% after six months, what will their prices be then? (c) If you hold a bond portfolio with 65% of capital on bond A and remaining capital invested in bond B, what is your portfolio's holding period return after six months (at the new YTM =8.7% )