D = D x (1 + g)^n + r) = FVt Problem 2.3 Torbay Corporation just paid a $1.50 per share dividend. The company will increase its dividend by 1.5% in perpetuity. The market return rate is 14% what is the current market price of its share? If you require a 12% return on your investment, how much will you pay for the company's stock today? D. 1 1 Problem 2.1 You have just received a heritage farm from your grandparents, which you sold for $250,000. You are planning to purchase a townhouse in East Vancouver, which is listed at $550,000. You can use the proceeds of $250,000 from the heritage as your down payment and you need a $300,000 mortgage loan. You applied for a 30-year mortgage at a 4.50% annual rate. If you chose to make monthly payments, how much will each payment be? How much will be the total amount interests you pay for the next 30 years? Problem 2.2 A Inc. issued 20-year, 6% semiannual coupon bond to finance its new project. A Inc. has a call option to retire the bond in the year seventh at a pre-determined price of $1,080. The bond sells for $990.00 a. What is the bond's yield to maturity? b. What is the bond's current yield? c. What is the bond's yield to call? d. What is the capital yield if this bond sold for $987.00 after one year?