Question 2 (25 Marks) Meta Computer Ltd. has an outstanding issue of bond with a par value of $1,000, paying 8 percent coupon rate semi-annually. And, the company just paid a dividend of $2.70 per share. The dividends are expected to grow at 5.0 percent for next 2 years. i.e. year 1 and 2, and after year 2, dividends are estimated to grow at 4 percent thereafter indefinitely. Based on market information, government bond's yield for 10-year maturity is 5 percent, market expected return is 15 percent, and beta of Meta's stock is 1.5. Assume no market friction and taxes. Required: (d) If interest rate is expected to decrease, what characteristics of stock based on CAPM would have better performance? Do you prefer to invest in Meta's stock or bond if interest rate is lower and why