estio You are considering investing in a bond that pavs 6% semi-annual coupons with $1,000 face value and 10 years to maturity Ifyou have bought the bond todav at a veld (APR) of 5%, what is vour purchase price? Is this a par, discount or premium bond? Explain. (a) (5 marks) One year later, the bond's YTM (APR) has gone up to 6% and you sell it immediately after receiving the coupons. (i) What is the bond's current yield? (ii) Under what condition will current yield and coupon rate be the same in value? (ii) What is the capital gains yield? (b) (2 marks) (2 marks) 5 marks) Boon Star Limited just distributed a dividend of $2. It is expected that Boon Star will increase its dividend by 20% in the coming year, 15% in the second year, 10% in the third year, and 5% in the fourth year. Starting from the fifth year, Boon Star will maintain the dividend growth rate at 5% per year. How much should the stock of Boon Star be worth today if the yearly required rate of retum is 9%? (8 marks) Assume the risk-free rate is 4% and the market retum is 10% Beta 1.6 Current price 35 Stock A According to the Capital Asset Pricing Model (CAPM), what is the required retum of Stock A? 3 marks)