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$80,000 at the end of the three years? (2 marks) E. Sara Shouppe has invested $100,000 in an account at her local bank. The bank will pay her a constant amount each year for 6 years, starting one year from today, and the account's balance will be 0 at the end of the sixth year. If the bank has promised Ms. Shouppe a 10% return, how much will they have to pay her each year? (3 marks) Question 2 (10 Marks) A. The Nickelodeon Manufacturing Co. has a series of $1,000 par value bonds outstanding. Each bond pays interest semi annually and carries a coupon rate of 7%. Some bonds are due in 3 years while others are due in 10 years. If the required rate of return on bonds is 10%, what is the current price of i. the bonds with 3 years to maturity? (1.5 marks) ii. the bonds with 10 years to maturity? (1.5 marks) iii. Explain the relationship between the number of years until a bond matures and its price. (2 marks) EU B. The Weatherfield Way Construction Company has common and preferred stock outstanding. The preferred stock pays an annual dividend of $7.50 per share, and the required rate of return for similar preferred stocks is 11%. The common stock paid a dividend of $3.00 per share last year, but the company expected that earnings and dividends will grow by 25% for the next two years before dropping to a constant 9% growth rate afterward. The required rate of return on similar common stocks is 13% i. What is the value of the company's preferred Shares? (2 marks) ii. What is the value of the company's common shares