Problem 1 (See pages 296 307) Humana Inc. is a for-profit American health insurance company based in Louisville, Kentucky. The company has a series of $1,000 par value bonds outstanding. Each bond pays interest annually and carries an annual coupon rate of 6%. Some bonds are due in ten (10) years while others are due in twenty-five (25) years. If the required rate of return on bonds is 5%, what is the current price of: (PLEASE SHOW YOU RWORK). a) The bonds with 10 years to maturity? MacBook Air Problem 2 (See pages 296 307) You are called in as a financial analyst to appraise the bonds of Merck & Company, Inc. The $1,000 par value bonds have a quoted annual interest rate of 5.4%, which is paid semiannually. The yield to maturity on the bonds is 6.4% annual interest. There are 25 years to maturity Compute the price of the bonds based on semiannual analysis. See page 307. (PLEASE SHOW YOU RWORK). Problem 3 (See pages 307 - 309) The preferred stock of Humana Inc. pays an annual dividend of $3.2. What is the fair price of the preferred stock if the required return is: (PLEASE SHOW YOUR WORK). a) 5% b) 8% c) 12% Problem 4 (See pages 310 - 314) Humana Inc. paid a dividend on common stock of $1.80 last year (Do= $1.80). Over the next years, the dividend is expected to growth at 10%, which is the constant growth rate for the firm. The required return on common stock (Ke) is 12%. Compute the current fair price of the stock (Po). PLEASE SHOW YOUR WORK