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(1-b)EPS Po = k-8 in year 1 earnings per share is EPS1, of which the company retains the value of b and a dividend is paid (1-b). With a value b retained in the firm, the firm makes growth investments that yield a return r. Company profit growth rate g = b*r. The investor's return requirement is k Assume that the share price is determined by the formula above EPS1 is $ 5. Assume that bis 0.3. Tests the sensitivity of the stock price when the investor's return requirement and growth rate of return on investment varies. Vary the investor's return requirement between 5%, 6%,....12% and the return on growth investment between 0 %, 1%, 15.15%. So you calculate the share price by varying the above parameters according to the instructions. Calculation of the answer to the table format below to two decimal places. (if negative and / or non-determinable values appear in the response calculation, delete them. They should not remain answer table.) Return on growth investments 0 % 1 % 2 % 3%... ...15 % investor return requirement 5 % 6 % 12 % a Three different loans are considered: (i) a zero-coupon loan, (ii) a bullet loan with an annual coupon rate of 3%, (iii) a flat-rate loan(linear mortgage loan) with an annual coupon of 2% to be paid annually from what is left. Each loan is 4 years and the nominal value of each loan is 500,000. a) Calculate the market price of each loan to the nearest whole number at the time of issue when the investor's return requirement r is 1%, 2%, ..., 10%. ) The answer table format (Excel) r i: zero-coupon loan ii: Bullet iii: Flat-rate loan 1 % 2 % ... 10 % b) Calculate the duration of each loan to two decimals, when the investor's return requirement is 5%

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