Jordan Valley Corporation has three different investments in bonds and stocks currently outstanding. Bond One has a face value of JOD 20,000 and matures in 20 years. Bond One makes no interest payments for the first 4 years, then pays JOD 1,100 semi-annually over the subsequent 8 years, and finally pays JOD 1,400 every six months over the last 8 years.

Bond Two also has a face value of JOD 20,000 and a maturity of 20 years; it makes no interest payments over the life of the bond.

Stock A is for Gulf manufacturing company. Gulf Company has just paid JOD 10.46 dividend, but management expects to reduce the dividend payout by 4% per year indefinitely.

Required:

As a financial analyst at Jordan Valley Corporation, you are required to estimate the market value of the bonds knowing that the required return on both bonds is 8% compounded semiannually and the market value of Stock A knowing that the required return on stocks is 12%.