Referencing Styles : Harvard A. BlackSteel Manufacturing Company has been generating stable revenues but sees no growth in it for the foreseeable future. The company's last dividend was $3.25, and it is unlikely to change the amount paid out. If the required rate of return is 12 percent, what is the share worth today? B. MineCast has not paid out any dividend in the last three years. It does not expect to pay dividends in the next two years either as it recovers from an economic slowdown. Three years from now it expects to pay a dividend of $2.50 and then $3.00 in the following two years. What is the present value of the dividends to be received over the next five years if the discount rate is 15 percent? C. You are interested in investing in a company that expects to grow steadily at an annual rate of 6 percent for the foreseeable future. The company paid a dividend of $2.30 last year. If your required rate of return is 10 percent, what is the most you would be willing to pay for this share? (Round to the nearest dollar.) D. Ryder Supplies has its share currently selling at $63.25. The company is expected to grow at a constant rate of 6.5 percent. If the appropriate discount rate is 17 percent, what is the expected dividend, a year from now?A. Rachel McGovern bought a 10-year bond for $921.77 seven years ago. The bond pays a coupon of 15 percent semiannually. Today, the bond is priced at $961.92. If she sold the bond today, what would be her realised yield? (Round to the nearest percent.) B. Shawna Carter wants to invest her recent bonus in a four-year bond that pays a coupon of 11 percent semiannually. The bonds are selling at $962.13 today. If she buys this bond and holds it to maturity, what would be her yield? (Round to the closest answer.) C. Starskeep Ltd is a fast growing technology company. The company projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two years. After that, the company expects a constant-growth rate of 8 percent. The company expects to pay its first dividend of $1.25 a year from now. If your required rate of return on such shares is 20 percent, what is the current price of the share? D. Denyer & Grant Ltd., is a fast growth share and expects to grow at a rate of 25 percent for the next four years. It then will settle to a constant-growth rate of 10 percent. The first dividend will be paid out in year 4 and will be equal to $4.50. If the required rate of return is 16 percent, what is the current price of the share? Note: Must provide detailed workings for the above questions. Task 3 (2 x 10 marks each = 20 marks) Do you agree with the following statements? Give examples to support your answer. A. “A security's intrinsic value is the price that reflects investors' estimates of the value of the cash flows they expect to receive in the future”. B. “If the securities market is working efficiently, the market value of a security will always be higher than its intrinsic value.” Task 4 (2 x 10 marks each = 20 marks) A. Does the default risk premium vary over the business cycle? Use an example to support your discussion. B. What is the marketability premium? Why should an issuing company (whether issuing bonds or shares) consider paying this premium?