PROBLEMS: 1) I have an investment in Microsoft corporate bonds. The bonds will mature in 10 years and have a coupon rate of 3%. When I purchased the bonds the market rate of interest was 3.025%. Did I purchase the bonds at a discount or a premium? Explain your answer. 2) I now want to sell my investment in bonds and the market rate of interest is 2.875%. Will I be able to sell the bonds at a premium to what I paid for them or at a discount, and explain your answer. 3) What is the difference between the meanings of coupon rate and market rate? When is each rate relevant? 4) Hobson company has outstanding 40,000 shares of $50 par value, 6% cumulative preferred stock and 100,000 shares of $10 par value common stock. The company declares and pays cash dividends amounting to $280,000. a) If there are no preferred dividends in arrears, how much in total dividends, and in dividends per share, does Hobson pay to each class of stock? b) If there are one year's dividends in arrears on the preferred stock, how much in total dividends, and in dividends per share, does Hobson pay to each class of stock? 5) If a company repurchases its stock, Treasury Stock, what impact does that have on EPS? 6) If instead of issuing a cash dividend a company instead issues a stock dividend, what is the impact to the shareholders? Do they need to report anything that year on their tax return for the dividend and why might a shareholder like getting a stock dividend instead of cash