Solve the problems below using well-formatted Excel solutions. Do not hardcode numbers in the formulas..only use cell references to the input data. I will change the input data in your problem to check alternate solutions. You will turn in a complete working Excel spreadsheet with your solution.

1) What is the price of a semiannual $1,000 par value bond with four years left until maturity that pays a coupon of 3.75% and is yielding 5.25%? What would it be yielding if the price decreased to $973.47? Assume semiannual compounding for both.

2) Coffee shop chain Java the Hut just paid a $2.70 dividend. There are two possible pricing scenarios:

a. Scenario 1: You expect the stock will grow at 7% per year forever. Assuming 13% required return, what is the value of Javas stock?

b. Scenario 2: For the next two years, you think it will grow by 12% a year, getting it back to its pre-recession level. After that, you expect it to grow at 5% a year forever. Assuming 13% required return, what is the value Javas stock?