Mr. Bongga has P100,000 worth of savings from his lucrative face mask business during the onset...

 

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Mr. Bongga has P100,000 worth of savings from his lucrative face mask business during the onset of the pandemic. Now that face mask demand has normalized, he wants to invest the money in bonds instead. There are two options for Mr. Bonga to choose from. Option 1: SanMiggy is issuing a 10-yr bond that has a coupon rate of 7.25% annually. The issuer will use the funds raise for beefing up their rubbing alcohol production capacity. The yield to maturity rate is 6.7949% with a par value of P100. Option 2: BancoDeBlu is issuing a 10-yr bond that has a P95 par value, a coupon rate of 8% annually with k of 7.7%. Funds raised will be for the upgrade of their online banking infrastructure. 1.) After a year, the SanMiggy bond price rose to PHP107, what is the current yield of SanMiggy, during this period? 2.) What is the current bond value of Banco DeBlu? 3.) What is the current bond value of SanMiggy? 4.) Assuming Banco DeBlu's terms are re-written and it becomes a zero coupon bond prior to issuance (as there are no longer cash flows expected in 10 years), what would be the new current value of the bond? 5.) If purchased at current value, how many units of SanMiggy bonds can be invested by Mr. Bongga's savings? (round down to whole number, as applicable) 6.) Assuming Mr. Bongga purchased SanMiggy at par value on year 0 and after a year decided to sell the bonds which is selling at PHP109. What is his capital gain / loss in percent? (use percentage, exclude the" %" sign) 7.) If purchased at par value, how many units of BancoDeBlu bonds can be invested by Mr. Bongga's savings? (round down to whole number, as applicable) 8.) What will be the current bond value of SanMiggy if interest of PHP 3.625 is to be paid in a semi annual basis? Mr. Bongga has P100,000 worth of savings from his lucrative face mask business during the onset of the pandemic. Now that face mask demand has normalized, he wants to invest the money in bonds instead. There are two options for Mr. Bonga to choose from. Option 1: SanMiggy is issuing a 10-yr bond that has a coupon rate of 7.25% annually. The issuer will use the funds raise for beefing up their rubbing alcohol production capacity. The yield to maturity rate is 6.7949% with a par value of P100. Option 2: BancoDeBlu is issuing a 10-yr bond that has a P95 par value, a coupon rate of 8% annually with k of 7.7%. Funds raised will be for the upgrade of their online banking infrastructure. 1.) After a year, the SanMiggy bond price rose to PHP107, what is the current yield of SanMiggy, during this period? 2.) What is the current bond value of Banco DeBlu? 3.) What is the current bond value of SanMiggy? 4.) Assuming Banco DeBlu's terms are re-written and it becomes a zero coupon bond prior to issuance (as there are no longer cash flows expected in 10 years), what would be the new current value of the bond? 5.) If purchased at current value, how many units of SanMiggy bonds can be invested by Mr. Bongga's savings? (round down to whole number, as applicable) 6.) Assuming Mr. Bongga purchased SanMiggy at par value on year 0 and after a year decided to sell the bonds which is selling at PHP109. What is his capital gain / loss in percent? (use percentage, exclude the" %" sign) 7.) If purchased at par value, how many units of BancoDeBlu bonds can be invested by Mr. Bongga's savings? (round down to whole number, as applicable) 8.) What will be the current bond value of SanMiggy if interest of PHP 3.625 is to be paid in a semi annual basis?