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QUESTION 12 Rico has one share of stock and one bond issued by the Island Adventure Company. The total value of the two securities is

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QUESTION 12 Rico has one share of stock and one bond issued by the Island Adventure Company. The total value of the two securities is 51,080. The bond has a YTM of 9.8 percent, a coupon rate of 8.8 percent and a face value of $1,000: pays semi-annual coupons with the next one expected in 6 months and matures in 6 years. The stock pays annual dividends and the next dividend is expected to be $12.30 and paid in one year. The expected return on the stock is 19.0 percent. What is the price of the stock expected to be in 1 year? a. 5135 94 (plus or minus 50.10) b. 5148.24 (plus or minus $0.10) 5115.01 plus or minus 50.10) d. 582.90 (plus or minus 50.10) e. None of the above is within 50.10 of the correct

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