1-A. The marketing manager at Sonys Playstation3 is evaluating his choices. If he can launch the product in Nov 2005, he estimates he can sell $2 billion worth of console in its first year. However, if the launch is delayed by a year (to Nov 2006), the competitor Microsofts headstart will reduce the first-year sales by 20%. If the interest rate is 4%, what is the cost of a delay of the first years revenues in terms of dollars in 2005? ( 2 Marks)

1-B. In Nov 2021, the GSecs maturing in Nov 2026 offered a coupon of 8.2% per annum paid semi-annually. Calculate the price of the security if the yield-to-maturity is 7.05%. (2 Marks)

1-C. Pal Ltd. earnings and dividends have been growing at the rate of 8% per annum. This growth rate is expected to continue for 3 years. After that the growth rate would fall to 6% for the next three years. Beyond that the growth rate is expected to be 2% forever. If the previous years dividend was INR 2.50 and the investors required rate of return on the stock of Pal Ltd. is 18%, how much should be the market value per