Please write caluclations as well, to know how you got the answer. If your using calculator please mention which buttons on the financial calculator.

1.I) Computing the Present Value of a Debt Security

Compute the present value of a three-year bond with a face value of $5,000, and 8% annual coupon payment, and a 9% effective rate.

II) Estimating Cost of Equity Capital

Assume that the company’s market beta equals -0.8, that the risk-free rate is 5%, and the market return equals 8%. Compute the company’s cost of equity capital.

III) Estimating Cost of Debt Capital

Assume that the company’s financial statements report that its average outstanding debt totals $1.6 billion, and its total interest expense equals $80 million. If its tax rate is 35%, compute its cost of debt capital.

IV) Estimating Weighted Average Cost of Capital

Assume that a company has $1 billion in preferred stock and $3 billion in common stock. Also, it pays 6% dividend on preferred stock and its cost of equity capital is 7%. The company has no debt, Compute the company’s WACC.

V) Applying DDM with Constant Perpetuity

Assume that a company’s dividends per share are projected to remain at $1.1 in perpetuity, and that its per share stock price is $22. Estimated the company’s cost of equity capital.

VI) Estimating Company Value Using DDM with Increasing Perpetuity

Assume that a company paid $1.2 dividend per common share, its dividend per share is expected to grow at a constant rate of 2%, and its cost of equity capital is 5%. Estimate the company’s per share stock price.