MAY SEMESTER 2022/2023 SESSION MATRIC NO.: QUESTION ONE (10 MARKS) You are considering three investments. The first is a bond that is selling in the market at RM1,100. The bond has a RM1,000 par value, pays interest at 13% and is scheduled to mature in 15 years. For bonds of this risk class you believe that a 14% rate of return should be required. The second investment that you are analyzing is a preferred stock (RM100 par value) that sells for RM90 and pays an annual dividend of RM13. Your required rate of return for this stock is 15%. The last investment is a common stock (RM25 par value) that recently paid RM2 dividend and has a projected constant growth rate of 2.5%. The stock is selling for RM20 and you think a reasonable required rate of return for the stock is 20%. i. Calculate the value of each security based on your required rate of return. (8 marks) ii. Which investment(s) should you accept? Why? (2 marks)