Mr. Z is considering investing in three financial securities as follows.

• First: A 25-year bond with 8% annual coupon rate with interest paid on semiannual basis. The bond has 1,000 baht as par value and was issued ten years ago.
• Second: A preferred share with 10 baht as par value paying 25% dividend rate. Assume the first dividend will be received in the next five years.
• Third: A common share issued by MN-Corporation in which the first dividend per share of 0.5 baht is expected to be received in year 3 and dividend is expected to increase at 7.5% growth rate.

1. If Mr. Z. requires 6%, 9%, and 13% return from investing in bond, preferred share, and common share, respectively, how much Mr. Z is willing to buy each of these securities today?
2. If the current market prices of the security are 1,100 baht, 22 baht, and 12 baht for bond, preferred share, and common share, respectively. Which security (securities) should be purchased by Mr. Z, explain?

Security	Value	Price	Underpriced or overpriced	Buy or not buy
Bond
P/S
C/S