MGF611 HOMEWORK No. 3 - FALL 2020 1. A ten-year U.S. Treasury bond with a face value of $10,000 has a coupon rate of 5%; coupon payments are made semi-annually. If the interest rate (i.e., bond yield) is 3.4% per year, what is the price of the bond? 2. A common stock will pay a dividend next year (i.e., at t-1) of $5.00. For three years after that i.e., for t=2, t=3, and t=4), the dividend will grow at 7% per year, After t-4, the dividend will grow at 3% per year, forever. If the opportunity cost of capital is 15%, what is the price of the common stock