What is the impact on the value of this call option when three months elapse, with no other change. Explain your result. (5 points)

ii. Jonnie Depp Productions (JDP), suspended its dividend at the start of 2009 and as of the middle of 2012, has not reinstated its dividend. Suppose you do not expect JDP to resume paying dividends until July 2014. You expect JDPs dividend in July 2014 to be $1.20 (paid annually), and you expect it to grow by 6% per year thereafter. If JDPs equity cost of capital is 10%, what is the value of a share of JDP in July 2012? Explain your result. (15 points)

iii. A 6% five-year bond yields 15% and a 10% five-year bond yields 10%. Calculate the fifth-year spot rate. Assume annual coupon payments. Explain your result. (15 points)