Question: QUESTION 4 (10 MARKS) Zhen Yi Computers has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semi-annually.

QUESTION 4 (10 MARKS) Zhen Yi Computers has an outstanding issue

QUESTION 4 (10 MARKS) Zhen Yi Computers has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semi-annually. The bond was issued 25 years ago and has 5 years to maturity. Required: a. What is the value of the bond assuming 14 percent rate of interest? (4 marks) b. What is the current yield? (2 marks) C. O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal annual, not semiannual yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $1,075. What is the bond's nominal coupon interest rate? (4 marks)

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