Question 4: What is the value today of the following two bonds? Which of the two bonds has a greater value today bond A or B? (10 points)

Bond A:

Par Value: $1,200

Coupon Rate = 10% paid annually

Yield to Maturity = 5%

Maturity = 4 Years

Bond B:

Par Value: $1,600

Coupon Rate = $110 paid annually

Yield to Maturity = 3.5%

Maturity = 6 Years

Question 5: What is the expected dividend yield and capital appreciation rate for the following share of common stock. (10 points)

Po = $41

P1 = $37

D1= $2.50