1. i) PDQ Corporation is forecast to have total earnings of $1 billion next year and to pay out a total of 25% of these earnings to shareholders in the form of share repurchases and dividends.PDQ Corporation has 100 million shares outstanding.Its earnings are forecast to grow at a rate of 4% constantly.The stock's required rate of return is 10%.What is the value of a share today?Answer in dollars and round to the nearest cent.

ii) Your company currently has $1000 par, 5.75 % coupon bonds with 10 years to maturity and a price of $1,066. If you want to issue new10-year coupon bonds atpar, what coupon rate do you need toset? Assume that for bothbonds, the next coupon payment is due in exactly six months.

iii) Suppose aten-year, $1,000 bond with an 8.4 % coupon rate and semiannual coupons is trading for $1,035.31.

a. What is thebond's yield to maturity(expressed as an APR with semiannualcompounding)?

b. If thebond's yield to maturity changes to 9.4 % APR, what will be thebond's price?