A$.$ What is a Convertible Bond?

$(3$ marks$)$

B$.$ Foed Motor Company issues bonds with a $25-$year maturity, a $$1000$ par value, a $15\%$ coupon rate and semi$-$annual interest paymerts. What price would bonds sell for, if the going rate of interest is $8\%?$

$(5$ marks$)$

C$.$ H$.$ Limited's bonds have $8$ years remaining to maturity. Interest is paid annally. The face value of the bonds is $$1000,$ and the coupon rate is $20\%.$ What is the yield to maturity at a current market price of $$750?$

$(8$ marks$)$

D$.$ What is the futare value of a $10-$year ordinary annuity that promises to pay $$60000$cach year at a raic of $24\%$ per annum?

$(4$ marky$)$

E$.$ B$.$ Limited's stock currently sells for $$55$ a share. The stock just paid a dividend of $$10$ per stoek. Dividend is expected to grow at a constant rate of $15\%$ a year.

i$.$ What stock price is expected one year frem now?

$(3$ marks$)$

ii$.$ What is the required rate of retum on the company's stock?

$(3$ marks$)$

iii. What will be the nominal rate of return on a preferred stock with a $$250$ par value, a stated dividend of $12\%$ of par and a current market price of $$150?$

$(3$ marks$)$