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Question 1. The DDM model assumes that the value of a share ofstock equals the present value of its expected future cashreceipts. The elements of the computation are: Dividend one yearhence: D(1) = €3, Stock price one year hence: P(1) = €24 and Annualrisk adjusted discount rate:1 k = 12.5%.Question 2. The Blue Dog Company has common stock outstandingthat has a current price of $20 per share and a $0.5 dividend. BlueDog’s dividends are expected to grow at a rate of 3% per year,forever. The expected risk-free rate of interest is 2.5%, whereasthe expected market premium is 5%. The beta on Blue Dog’s stock is1.2 . a) What is the cost of equity for Blue Dog using the dividendvaluation model?, b) What is the cost of equity for Blue Dog usingthe capital asset pricing model?Question 3. Problem: Suppose you have the following about abond: Price = $1,494.96 Par Value = $1,000.00, Coupon Rate =10%,N=14. Please find the YTM.Question 4. Find the price of a 8% coupon bond (semi-annualpayments) with a par value of $1,000 and a 15-year maturity if themarket rate on similar bonds is 10%.