2. Common stock valuation (perpetuity with growth model). Use the constant growth model to calculate the fair price for the following common stock: annual dividend $2, growth rate in dividends 10%, investor's expected return 20%

Autopia is planning to issue a bond with a face (par) value of $40,000,000 and a stated interest rate (coupon rate) of 4 percent. Interest payments are made twice annually for a 30 year term. **Format all answers with commas to separate thousands, hundred thousands, millions, etc. Please format answers as indicated below. What will be the amount of each semi-annual interest payment on the bond? Please round to two decimal places (e.g., 500,000.00) How much can the New University expect to receive at bond issuance, assuming that the interest rate at issuance is the same as the coupon rate? Please round to two decimal places (e.g., 3,500,000.00) How much will Autopia receive if interest rates have increased to 4.5 percent at the time of issuance? Please round to two decimal places (e.g., 3,500,000.00)

Gracelyn, age 55, has decided to take early retirement from her position as a city manager so that she can launch a consulting career. She is trying to decide what to do with her savings in a retirement account into which she has been paying over the past several decades. Her options are: A) Leave the retirement fund invested until age 67, when she expects to retire fully; or B) Receive an annuity over the next 12 years until her retirement. The annuity, paid out at $3,000 per month, will exhaust the savings in this particular account. Assumptions: • The amount in the retirement account is $300,000. • The monthly annuity payment she will receive is $3,000 (monthly for 12 years) • The annual interest rate on either investment is .07 • Compound monthly. Work through the following questions to help Gracelyn make this decision and round both answers to the nearest dollar: Calculate the future value of retaining funds in the retirement account with monthly compounding. Answer: $ = 2. Calculate the future value of the annuity. Answer: $ =

Explain to Gracelyn which of the two options she should choose, and why. Note that while Gracelyn is politically astute she does not have training in financial analysis and so needs you to "translate technical concepts for her.

The City Council of Radiator Springs is considering a proposal to encourage tourism through the development of a water park. The developers have asked the city to provide a grant of $1,000,000 to help pay for construction of the park. They claim that the park will increase sales and tourism taxes to the community in the amount of "at least" $60,000 per year for 20 years. The mayor, who supports the investment, claims that the grant will have a return on investment of 20 percent over the life of the project. Please format the answers as required below. A. Calculate the net present value of the proposed investment, with a discount rate of 4 percent (the current earning on Radiator Springs' investment portfolio). Record the answer rounded to the dollar (e.g., 250,000, not 250,000.00) (5 points) • NPV = B. What is the internal rate of return on this proposed investment? Please report the IRR as a decimal and not percentage, carried out to three decimal points (e.g., 0.025 or 0.037, not 2.5% or 3.7%) (5 points) • IRR =

Explain your math (you can paste in the excel work if you wish). Also, interpret the findings with a brief statement of explanation to the City Council. Note that only Councilmember Mater has any background in finance, so you will need to target your explanation for a non-expert audience.

Higher trading portfolio implies more interest risk Duration implies how much a bank will lose if market interest rises by 0.5%.

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ESG PerformanceLaunched Group ESG Strategy.appointing first Chief Sustainability OfficerEmCap raised AED 69bn of sustainable capital from loan and debt markets1st Bank in UAE and GCC to join UNEP FI's NZBARaised first sutainability linked loan:32%of FAB's Senior Management are womenKP11:Women in senior management50%of the Khalifa Fund portfolio is managed by FABKP12:Reduction in water consumptionLend,invest and facilitate bsuiness of 72bn USD by 2030Masdar Green REIT1st Sustainability linked aviation loan of 1.2bn USDESG Certification of 130 employees762K new Ratibi prepaid cards issued in 2021Wealth Management and Sustainable Investment FrameworkSigned upt o UN PRI-Principles for Responsible Investment