Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at well below par value. He has his eye on a bond issued by the Leisure Time Corporation. The $1,000 par value bond with semiannual payments has 6 percent annual interest and has 15 years remaining to maturity. The current yield to maturity on similar bonds is 14 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answers to 2 decimal places.)

a. What is the current price of the bonds? Use Appendix B and Appendix D. Current price $____

b. By what percent will the price of the bonds increase between now and maturity? Price increases by %_____

c. What is the annual compound rate of growth in the value of the bonds? (Use Appendix A) Annual compound rate %______

The Fleming Corporation paid a dividend of $0.80 last year. Over the next 12 months, the dividend is expected to grow at 10 percent, which is the constant growth rate for the firm. The new dividend after 12 months will represent D1. The required rate of return is 17 percent.

Compute the price of a common share. (Round the final answer to 2 decimal places.)

Common share price $ _______