3. An investor is considering purchasing shares of preferred stock that pays a dividend of $3 per share. The market price is $40 and the investor requires a 10% annual rate of return. [15 points] (a) Calculate the net present value (b) Explain whether the investor should purchase this preferred stock? (c) Calculate the rate of return eaned if shares are purchased at a market price of $25. 4. Consider a $1 000 par value bond that offers a coupon rate of 8% per year and matures in t welve years. 13 points] (a) Calculate the price of this bond to an investor who requires a 9% annual rate of return. (b) Suppose interest is paid semiannually. Calculate the price of this bond for an investor who requires a 10% annual rate of return