(a) YYY Corporation bonds have an annual coupon of 14%, pay interest semi-annually, and they will mature in 7 years. Your par value is RM1,000 and required rate of return for such an investment is 10% annually. Calculate;

(i) Bond value. (ii) Unit of bond you can purchase and yearly income, given RM90,000. (iii) The value of the reinvestment, where the coupon interest is 12% and the amount you will receive at the end of 7 years with your principal.

(b) AAA Company stock paid a dividend of RM3.00 last year, and RM3.25 this year. The increase in the dividend is similar to the long-term growth of the company. Considering the risk, your required rate of return from this stock is 14%. Find the price of the stock.

(c) Elaborate on stock dividend and cash dividend.