Your client has been offered a 10-year, $1,000 par value annual bond with a 8 percent coupon rate and an YTM of 12%. 1. The bond is a discount bond or premium bond? 2. What should be the price of the bond? 3. What is the current yield on the bond? 4. What is the capital gains yield of on the bond? 5. You have just purchased a 5-year, $1,000 par value bond. The coupon rate on this bond is 6 percent annually, with interest being paid each 6 months. If you expect to earn a 10 percent simple rate of return on this bond, how much did you pay for it?

A high tech company - Integrated Corporation has 1 million outstanding preferred stocks and 10 million common stocks. Its preferred stock pays an annual dividend of $1.50 and its required rate of return is 10%. The common stock just paid a $1 dividend, which is expected to grow at 8% forever. The required rate of return on common stock is 12%. 6. What is the intrinsic value of the preferred stock? 7. What is the intrinsic value of the common stock? 8. What is the dividend yield of the common stock? 9. What is the capital gains yield of the common stock? 10. If you observe the market price of ABC stock is $30, the stock will pay $2.00 dividend per share and grow at 7% forever. What is the required rate of return on the stock?

Show Work, formulas, and explanations!