Question: please show formula while solving A US corporate bond has a coupon rate of 3%, a par (face) value of $1,000 and will mature in

 please show formula while solving A US corporate bond has a

please show formula while solving

A US corporate bond has a coupon rate of 3%, a par (face) value of $1,000 and will mature in 3 years. The current yield on similar bonds is 2.5%. a) Using the information given above and assuming coupons are paid semi- annually, calculate the value of the corporate bond. (2 marks) b) Calculate the duration of the US corporate bond described above (assume semi- annual coupon payments). (4 marks) c) Consider the following stocks: Stock A is expected to pay a dividend of $0 next year and then from year 2 onwards a dividend of $2.50 every year, Stock B is expected to pay a dividend of $1 next year, $2 in year 2, with dividend growth expected to be 3% per annum from year 2. If the required return on similar equities is 10%, calculate the price of each stock. (4 marks)

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