a. Use the constant-growth dividend model (Gordon growth model) to find the value of each firm shown in the following table. (10m)

b. Even though most corporate bonds in the United States make a coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of 1,000, 23 years to maturity, and a coupon rate of 3.8% paid annually. If the yield to maturity is 4.7%, what is the current price of the bond? (5 marks)

c. Excellent Berhad has bonds on the market with 14.5 years to maturity, a YTM of 5.3%, a par value of RM1,000 and a current price of RM1,045. The bonds make semiannual payments. What must the coupon rate be on these bonds? (5 marks)

Firm A B D E Dividend expected next year (RM) 1.20 4.00 0.65 6.00 2.25 Dividend growth rate Required return (%) (%) 8 13 5 15 10 14 8 9 8 20