1.What's the value of a preferred stock if it is assumed it has an annual dividend of $7.50 per share and the required rate of return is 15%?

2.A $100 bond, paying interest at 9.5 per cent, redeemable at par in 10 years find the value of bond if the required rate of return on debt is 15%.

3.A perpetual bond has face value $1,000, and coupon 8%. You bought this bond when the interest rates were 10%, and sold it when the interest rates were 12%. Find your

capital gain or loss in dollars.

4.Assume that ABC Company successfully issues a 6% convertible bond, due 12 years from now at $1,000 per bond.Also, assume that the bond is convertible into 100 shares of stock anytime during the life of the bond. Assume the common stock of the company is selling for $12 per share at the time the convertible bond is issued and is expected to grow 6% per year for foreseeable future the required rate of return on debt is 9%

Using the information above, calculate:

(a) market value

(b) floor value

(c) conversion premium