You are required to show your work. Providing answers alone will not get you full credit. 1. You are considering the following AA-rated, semi-annual coupon bond issued by Mata Toys. a. Is the bond a discount or premium bond? Explain. ( 2 marks) b. What is the current bond price? ( 2 marks) c. Calculate its current yield. (2 marks) 2. BEE Corporation just issued some new preferred stock. The preferred stock will pay an annual dividend of $5 in perpetuity, beginning 3 years from now. If the market requires a return of 6 percent on this investment, how much does a share of preferred stock cost today? (4 marks) 3. Suppose MAZ Inc., just paid a dividend of $3 per share. It is expected that the dividends will grow at a constant rate of 4 percent per year indefinitely. If investors require a 9 percent return on MAZ stock, a. What is the current price today? ( 2 marks) b. What will the price be in five years? ( 2 marks) 4. GTP Inc. stock is selling for $50 per share. The next dividend will be $1.80 per share, and the dividend is expected to grow at 6 percent forever. What is the dividend yield? The capital gain yield? The total required return? ( 4 marks) 5. CXB Inc. will pay a dividend of \$2 per share next year. Dividends are expected to grow at a rate of 6% until the end of year 4 , and will grow at a constant rate of 3% thereafter. What is the current share price of the common stock if investors require a return of 12% on common stock? ( 8 marks)