MacJolly Corporation is expecting a cash flow of $3,000,000 next year and it is expected to constantly increase by 4% for the next 2 years. After the third year, experts predict that the cash flow of the company will remain flat at $7,000,000 every year. The company has a total preferred shares of $10,000,000 and a total debt of $30,000,000. The required return is currently at 8% while the total common share outstanding is at 1,500,000 shares.

1. What is the value of the company?
2. What is the value of the common stock per share?

ODB Bank, a bank that just started its operation and is planning to declare the following dividends for the following years

                        Year 1 - $2.00 per share ; Year 2 - $2.50 per share ; Year 3 - $3.50 per share

After year 3 the company is expecting that dividends will start to increase at a constant rate of 5% per year.

1. What will be the value of the company's stock if the required return is 12%?
2. Would you recommend a buy position on ODB bank if the current stock price of the company is 38.50?

A 10%, 25 year bond with a par value of $1,000 pays on an annual basis has a current call feature amounting to 1,300 within 5 years.

1. What is the YTM of the bond if the current price of the bond is $1,100?
2. What is the YTC of the bond if the current price of the bond is $1,100?