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Problem 2: (18 marks) Peletron Inc. is a large corporation that produces specialized high-end automobile parts. You have obtained the following information from the company's financial statements: Long Term Debt Bond A 5-year bond issued February 1, 2019 2,000,000 Bond B 5-year bond issued August 1, 2020 1.500.000 Total Long Term Debt 3.500.000 Equity Preferred Shares Preferred Shares A Series A no maturity, 7% dividend, $75 par 500,000 value. Preferred Shares B Series B - no maturity paying a $5.25 dividend 500.000 Total Preferred Shares 1.000.000 Common Equity Common Shares 200,000 common shares authorized, issued and 2,000,000 outstanding Retained Earnings 500.000 Total Common Equity 2.500.000 Total Equity 3.500.000 Notes to the financials: All bonds have face value of $1,000 and pay semi-annual coupon. Bond A - was issued at a quoted price of 95.0 and pays 6% coupon. Interest is paid on February 1 and August 1 every year. Bond B - was issued at par and pays its 5% coupon. The firm is expecting the earnings to be $3,000.00 for 2021 and the dividend for August 1.2020 of $1.20 per share was just paid. Assume today is August 1, 2021. a) If the market interest rate for bonds that are identical to bond A is 4.5%, calculate the price of bond A in the market today. Show your work! (4 marks) b) If an investor bought bond A when it was first issued in February 2019 and sold the bond today, what is their effective annual holding period return? Show your work! (4 marks) c) Calculate the current yield for bond A. Show your work! (2 mark) d) Preferred shares Series A are priced in the market to provide a 6% rate of retur. Calculate the market price for the series A preferred shares. Show your work! (2 marks) e) During the board meeting, the members of the board were discussing some investing opportunities that would result in dividend growth of 20 percent for the next 5 years and then a growth 1.8% thereafter. Assuming the required rate of return for the investors is 9% and the firm takes the project, what is the expected price of the share today? Show your work! (6 marks)