Question: Note: Read carefully and attempt all questions. Each question has equal marks Q1: You are considering the purchase of bonds. These bonds have the following

 Note: Read carefully and attempt all questions. Each question has equal

Note: Read carefully and attempt all questions. Each question has equal marks Q1: You are considering the purchase of bonds. These bonds have the following characteristics. Purchase Price = Rs. 1200. P Coupon Rate = 8% per year. Kd Life = 20 years. At the time of issuance you were agreed with the following call options that if the company call back the bonds at the end of the 8th year it will pay Rs. 1000 face value and a premium of 30%, but if the company calls back at the end of 14th year it will pay a 24% premium with face value You are required to calculate all possible yields for these bonds. AN urrently navs a dividend of $1.60 per share on its common stocle

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