PART-B - Calculation questions (70 points in total) 1. Apple's bonds have 5 years remaining to maturity. Interest is paid semiannually, the bond has a $100 par value, and the annual coupon rate is 10%. The bond has a YTM of 15%. a. What should be the value of this bond? - Solve on the timeline (15 points) b. What is the current yield for the bond? (5 points) 2. A bond with 3 years remaining to maturity pays annual coupon payments of 10% and its nominal value is $1000. What should be the approximate YTM (yield to maturity) for this bond if its price is $800? - Use the trial and error method to solve this question. (25 points) 3. Facebook company paid a dividend of $3 this year. The company is expected to pay $4,5$ and $10 of dividends for the upcoming 3 years. Then it will enter a constant growth period. The plowback ratio of the company is 0.40 and it has a return of equity (ROE) ratio 15%. If the required return on the company is 7%, a. What is the current dividend yield of the company? (5 points) b. What is the horizon value of the company? (10 points) What is the value of each common stock of the company? (10 points) C. PART-B - Calculation questions (70 points in total) 1. Apple's bonds have 5 years remaining to maturity. Interest is paid semiannually, the bond has a $100 par value, and the annual coupon rate is 10%. The bond has a YTM of 15%. a. What should be the value of this bond? - Solve on the timeline (15 points) b. What is the current yield for the bond? (5 points) 2. A bond with 3 years remaining to maturity pays annual coupon payments of 10% and its nominal value is $1000. What should be the approximate YTM (yield to maturity) for this bond if its price is $800? - Use the trial and error method to solve this question. (25 points) 3. Facebook company paid a dividend of $3 this year. The company is expected to pay $4,5$ and $10 of dividends for the upcoming 3 years. Then it will enter a constant growth period. The plowback ratio of the company is 0.40 and it has a return of equity (ROE) ratio 15%. If the required return on the company is 7%, a. What is the current dividend yield of the company? (5 points) b. What is the horizon value of the company? (10 points) What is the value of each common stock of the company? (10 points) C