PROBLEM 3 (20 Marks) (i) (ii) (iii) A bond has a coupon of 6.5% and it pays interest semiannually. With a face value of$1000, it will mature after 10 years. If you require a return of 12% from this bond, what is the value of coupon bond? A stock that just paid a dividend (Do) of $5.00 per share with dividends growing at a constant 4% per year. If the required return is 13%, what is the stock price? The Corporation issues preferred stock that pays a dividend of Rs. 3.50 indefinitely. Investors could invest their money at 6%. For how much will the preferred stock sell? John is looking to purchase a zero-coupon bond with a face value of $1,000 and 5 years to maturity. The interest rate on the bond is 5% compounded annually. What price will John pay for the bond today? (iv)