Your wish to buy a home in Guelph. Your real estate agent assesses that to purchase a nouse in Guelph it would take payments of approximately $1,800 per month over 30 years at the 5 percent APR interest (with monthly compounding). What is the value of the mortgage with these terms? (20 MARKS) 2. Calculate the expected price of a stock given that the most recent dividend was $3.20. Dividends are expected to grow at a 15% rate for the next three years (i.e., t=0 to 1,t=1 to 2 , and t=2 to 3 ), after which they will permanently grow at a constant rate of 4%. The required return on the stock is 12\%. (25 MARKS) 3. At t=0 you buy a bond that has 4 years to maturity and pays annual coupons at a coupon rate of 5% on a par value of $1,000. At t=0 the bond trades at a yield-to-maturity of 10%. In one year (t=1), you receive the first coupon payment and immediately sell the bond. At t=1, the bond (with 3 years remaining) still trades at a yield-to-maturity of 10%. What is the capital gain in percentage terms and the net gain in percentage terms from the sale of the bond over the one-year period (i.e., from t=0 to t=1) ? (20 MARKS) 4. Are there differences in tax treatment between bond coupons and stock dividends from the point of view of a buyer of securities? How is each income source taxed? Explain. (15 MARKS) 5. Assume that TNT Inc. will sell a truck of widgets for $95,000 in four years, i.e, at time t=4. The widgets cost $57,000 to produce at t=0 (today). The discount rate on the widgets is 14 percent per year. Will TNT Inc. make a profit on this investment? If not, what is the dollar value of the loss? What should the discount rate be for TNT Inc. to break even? (20 MARKS)