1. You are considering the following corporate bond: $1,000 8% Par value Coupon rate Time to maturity Yield to maturity 4 years 6% a. What is the current bond price if the coupons are paid semi-annually? (3 marks) b. Is the bond a discount or premium bond? Explain. (2 marks) c. Calculate its current yield. (2 marks) 2. Suppose BTC Inc., just paid a dividend of $2 per share on its stock. It is expected that the dividends will grow at a constant rate of 4 percent per year indefinitely. If investors require a 12 percent return on BTC stock, a. What is the current price today? (3 marks) b. What will the price be in three years? (2 marks) 3. E Suppose BTC Inc., just paid a dividend of $2 per share on its stock. It is expected that the dividends will grow at a constant rate of 4 percent per year indefinitely. If investors require a 12 percent retuBZ Corporation just issued some new preferred stock. The issue will pay an annual dividend of $2 in perpetuity, beginning 5 years from now. If the market requires a return of 6 percent on this investment, how much does a share of preferred stock cost today? (6 marks) 4. AMC Inc. stock is selling for $30 per share. The next dividend will be $1.20 per share, and the dividend is expected to grow at 3 percent forever. What is the dividend yield? The capital gain yield? The total required retum? (4 marks) 5. Zebra Inc. will pay a dividend of $3 per share next year. Dividends are expected to grow at a rate of 8% until the end of year 3, and will grow at a constant rate of 3% thereafter. What is the current share price of the common stock if investors require a return of 12% on common stock? (8 marks)