David is thinking of buying RBC (Royal Bank of Canada) stock as part of his long-term retirement investment plan. From company annual report (published on January 1, 2023) he found that RBC paid a dividend of $2.75 per share on December 31st, 2022. Next dividend is expected on December 31st, 2023. RBC is expecting the dividend to grow at a rate of 8% for next 4 years. After that dividend will grow at rate of 4% for un-for-seen-able future. If the market rate of return is 10%, how much will be the value of RBC stock today which David is ready to pay? (10 marks show all your works using the timeline) b. GE (General Electric) has just issued a $1000 par value 8% coupon bond. The bond pays regular coupon payment at the end of the year and it will be matured in 15 years. If the market rate of return is 10%, what will be the price of this bond today? (8 marks - Please show all the calculation) What kind of (discounted, premium or par value) bond it is and why it is called so? (2 marks)

Q2. Cenovus Energy is evaluating two of its oil sands projects for its 2023 years capital budget. The required rate of return is 15%. The cash flow of the projects are as follows: P Q YR Cashflow YR Cashflow 0 -30,000.00 0 -90,000.00 1 10,000.00 1 28,000.00 2 15,000.00 2 25,000.00 3 8,000.00 3 31,000.00 4 9,000.00 4 20,000.00 5 9,000.00 5 32,500.00 a. Calculate NPV and payback period of project P and Q. (8 Marks pls show your calculation) b. If the projects are mutually exclusive which project will you choose and why? (2