1. The Hartford Telephone Company has a $1,000 par value bond outstanding that pays 8 percent semiannual interest. The current yield to maturity on such bonds in the market is 10 percent. The bond has 15 years to maturity. Compute the bond price.
2. The preferred stock of Denver Savings and Loan pays an annual dividend of $5.40. It has a required rate of return of 9%. Compute the price of preferred stock.
3. Laser Optics will pay a common stock dividend of $2.70 at the end of the year. The required rate of return is 12%. The firm has a constant growth rate of 6%. Compute the current price of the stock.