. Gonzalez Electric Company has outstanding a it] percent bond issue with a face value of $i,lltl per bond and three years to maturity. Interest is payable annually. The bonds are privately held by Suresafe Fire Insurance Company. Suresafe wishes to sell the bonds, and is negotiating with another party. It estimates that, in current market conditions, the bonds should provide a (nominal annual} return of 14 percent. What price per bond should Suresai'e be able to realize on the sale? . What would be the price per bond in Problem 1 if interest payments were made semiannually? . Superior Cement Company has an 8 percent preferred stock issue outstanding, with each share having a $1M} Face value. Currently, the yield is ID percent. What is the market price per sharell If interest rates in general should rise so that the required return becomes 12 percent, what will happen to the market price per shareiI . The stoclt of the Health Corporation is currently selling For $20 a share and is expected to pay a $1 dividend at the end of the year. Ifyou bought the stock now and sold it for $23 after receiving the dividend. what rate of return would you earn? . Delphi Products Corporation currently pays a dividend of $2. per share, and this dividend is expected to grow at a 15 percent annual rate for three years. and then at a it] percent rate for the next three years, after which it is expected to grow at a 5 percent rate forever. What value would you place on the stock if an 13 percent rate of return was required? . North lCreat Timber Company will pay a dividend of$i.5 a share next year. After this, earnings and dividends are expected to grow at a 9 percent annual rate indenitely. Investors currently require a rate of return of 13 percent. The company is considering several business strategies and wishes to determine the effect of these strategies on the market price per share of its stock. a. Continuing the present strategy will result in the expected growth rate and required rate of return stated above. b. Expanding timber holdings and sales will increase the expected dividend grth rate to ll percent but will increase the risk of the company. As a result, the rate of return required by investors will increase to IE percent. c. integrating into retail stores will increase the dividend growth rate to ill percent and increase the required rate of return to H percent