20. The termihal date Is the ate when the 8iowt rate becomes hon-constait PART II 1. BOND VALUATION You are considering a 3-year, $1,000 par value bond. Its coupon rate is 9%, and interest is paid semiannually. If your require an" effective annual interest rate (not a nominal rate)" 816% A. How much is the nominal rate? (1Mark) B. How much should you be willing to pay for the bond? (1 Marks) 2. STOCK VALUATION Melbourne Enterprises recently paid a dividend, Do, of $ 1.50. It expects to have non-constant growth of 18% for 2 years followed by a constant rate of 5% thereafter. The firm's required return is 12% A. What is the firm's terminal value? (1 Mark) B. What is the firm's intrinsic value today, Po? (1Mark)