1. With a view to raise large amount of debt financing for expansion purposes, Tulip Co. will issue bonds which would have a maturity of 15 years. The annual coupon interest rate on the bond is 8% and the par value of each bond is $2000 that pays interest semiannually. If the yield to maturity is 10% then find out the price of the bond? Upon calculation of the price please specify what type of a bond is this?

2. a) Platinum Plastics Inc. is planning to raise funding through issuance of bonds. Maturity is 15 years and the par value is $1000. Calculate the before tax cost of issuing bonds for the company using the approximation method if the coupon rate is 7%, the flotation costs are 3% and the selling price is $930 on the bonds. b) Platinum Plastics Inc. will also issue preferred stock which is expected to sell for $93 per share. The cost of selling is expected to be $6 per share. The dividend rate is 10% of the value of each share. Calculate the cost of issuing preferred stock for the company.

3. a. Viola Inc. paid its most recent (2020) annual dividend of $2.5 per share. The firms financial manager expects that these dividends will grow at a 4% annual rate over the next four years. If the firms cost of capital, rs, is 6.5%, then find out the price of the stock at the end of 2020.

b. If Viola Inc. paid $3.5 per share annual dividend at the end of 2024 and the firms manager expects the dividends to grow at 6% annual rate from then onwards for the foreseeable future, then please find out the price of the stock at the beginning of 2025 given the required return, rs is 6.5%.

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