Build a DCF model (in excel/or python) to value a hypothetical credit instrument with the following inputs. i. Instrument name: Security A ii. Issuer description: Issuer designs and manufactures wristwatches and timepieces for men and women. It sells its watches through boutiques, authorized retailers, or authorized repair centers worldwide. iii. Origination Date: 2020-01-01 iv. Maturity Date: 2025-12-31 v. Principal Outstanding: EUR 1,000,000 vi. Interest Details: i. 5% PIK (accrued) interest rate paid annually at the end of the year ii. 4% cash interest rate paid quarterly at the end of each quarter (assume Mar-31 is Q1, Jun-30 is Q2, and so on.) vii. Principal Amortization: 2% principal amortization per year due end of year viii. The instrument also comes bundled with warrants. Briefly explain at least 1 method that could be used to value the warrants. ix. The instrument was valued and acquired at par at origination date. x. Value the instrument as of 2023-06-30 by adding a +225bps credit risk adjustment to the origination discount rate.

Expected Outputs Your submission should address the following

i. Dirty price

ii. Clean price (if applicable)

iii. Dirty price percentage of par

iv. Clean price percentage of par (if applicable)

v. Yield to Maturity (if applicable)