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Q$1-)$ Bond P is a premium bond with a $12$ percent coupon. Bond D is a $6$ percent coupon bond currently selling at a discount. Both bonds make annual payments, have YTM of $9$ percent, have five years to maturity. What is the current yield for bond P$?$ For bond D$?$ If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P$?$ For bond D$?$

Q$2-)$The McKeegan Corporation has two different bonds currently outstanding. Bond M has a face value of $$20,000$ and matures in $20$ years. The bond makes no payments for the first six years, then pays $$1,100$ every six months over the subsequent eight years, and finally pays $$1,400$ every six months over the last six years. Bond N also has a face value of $$20,000$ and a maturity of $20$ years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is $8$ percent compounded semiannually, what is the current price of bond M$?$ Of bond N$?$

Q$3-)$Great Pumpkin Farms just paid a dividend of $$3\mathrm{.}5$ on its stock. The growth rate in dividends is expected to be a constant $5$ percent per year indefinitely. Investors require a $14-$percent return on the stock for the first three years, a $12-$percent return for the next three years, and $10-$percent return thereafter. What is the current stock price?

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