QUESTION 3: CIO 3 Valuation Principles (20 marks) wE Mobile Ltd. is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of \15 during the next 2 years, at \13 in the third year, and at a constant rate of \6 thereaftet. Snyder's last dividend was \\( \\$ 1.15 \\), and the required rate of return on the stock is \12. Calculate the value of the stock today.(7 marks) b) Chopper International's bond has a \12.80 coupon and a maturity value of \\( \\$ 1,000 \\). The bonds, which pay interest semi-annually, will mature in 25 years. If you require a pre-tax return of \15.5 on bonds of this risk, how much would you pay for one of these bonds after 6 years? ( 6 marks) c) You have estimated the following probability distributions of expected future returns for Stocks \\( \\mathrm{X} \\) and Y. Stock \\( Y \\) expected return is 14.9\\%; standard deviation is \12.14 and Coefficient of variation is 0.49 . What is the expected rate of retum for Stock \\[ \\mathrm{X} \\text { ? } \\] (2 marks) i. What is the standard deviation of expected returns for Stock X(4 marks) ii. Which stock would you consider to be riskier? Why? (1 mark)