2. You are considering investing in shares of MacLeod Industries, which is currently trading at $50 per share, just paid a $4.40 dividend, and plans to maintain a 4.00% growth rate in its dividend. You also know that the expected return on the market is 14.00%. Should you purchase this stock, why or why not? (you must support your decision with numbers!) (9) 3. Coca Cola's closing price on 11/20/18 was $49.38 per share on 11/20/17 Coke's share price was $43.93. During the year Coke paid a dividend of $1.54 per share. What is the total return earned on Coca Cola over the last year? What is Coke's dividend yield and capital gains yield over the year? (9) 4. Microtech Corporation is expanding rapidly, and it currently need to retain all of its earnings; hence it does not pay any dividends. However, investors expect Mircrotech to begin paying dividends, with the first dividend of $1.00 coming 3 years from today. The dividends should grow rapidly-at a rate of 50% per year-during years 4 and 5 . After year 5, the company should grow at a constant rate of 8% per year. If the required return on the stock is 15%, what is the value of the stock today? 5. What is the term structure of interest rates, and what is the yield curve? Describe and draw a normal yield curve and an inverted yield curve. (5) 6. You purchased a 5-vear annual interest coupon bond one year ago. Its coupon interest rate was 6% and its par value was $1,000. At the time you purchased the bond, the yield to maturity was 4%. You sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 396-What is your total benefit (gain or loss in dollars) from holding this bond? (9) 7. KL Airlines paid an annual dividend of $1.42 a share last month. The company is planning on paying $1.50, $1.75, and $1.80 a share over the next 3 years, respectively After that, the dividend will be constant at $2 per share per year. What is the market price of this stock if the market rate of return is 10.5 percent? (9) 8. A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid semi-annually. If the current market price is $750, what is the yield to maturity for this bond? What would happen to this bond's price ifyield to maturity suddenly dropped to 3.5%? (9)