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Question(s) / Instruction(s):

1.) Determine the price of a $1,000 par bond that has a ten-year maturity and 10% coupon while the market rate of interest is 6%. 2.) Determine the value of a share of preferred stock that has a $2 dividend while the market rate of interest is 12%. 3.) Determine the value of a share of common stock that has a $1 dividend, 4% growth rate, and a required rate of return of 13%. 4.) An IBM bond pays 7% interest, and a Florida State bonds pays 5%. If you are in a 40% tax bracket, which should you purchase? (Assume that the level of risk is the same for both bonds)

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