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)

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