Please use excel and show the formulas used for the problem.

Problem Set #6: Answer these two problems 1. Determine the price of a share of stock whose last annual dividend payment (Do) was $1.50, assuming a required rate of return of 12% and considering the following: a) The dividend payment is expected to remain constant (i.e., g = 0) indefinitely. b) The dividend payment is expected to grow at a constant rate of 3% per year indefinitely. c) The dividend payment is expected to grow at a rate of 8% for four years and then immediately decline to 3% indefinitely. See formula 9-5 on page 278 of the book. 2. You are considering the following bonds to include in your portfolio: Price Face Value Coupon Rate Frequency Maturity (Years) Required Return Bond 1 Bond 2 $900.00 $1,100.00 $1,000.00 $1,000.00 7.00% 10.00% 1 2 15 20 9.00% 8.00% Bond 3 $1,000.00 $1,000.00 9.00% 4 30 9.00% a) Determine the highest price you would be willing to pay for each of these bonds using the PV function. Also find whether the bond is undervalued, overvalued, or fairly valued. b) Determine the yield to maturity on these bonds using the RATE function assuming that you purchase them at the given price. Also calculate the current yield of each bond