Question: Question 4 6 points Chapter CL04 . You work as an analyst in the finance department at the Zenner Corporation The company has been listed
Question 4 6 points Chapter CL04 . You work as an analyst in the finance department at the Zenner Corporation The company has been listed on the Abu Dhabi Stock Exchange since 20 May 2020. The business operates in the Basic Materials sector and is involved with the discovery, development and processing of raw materials to be used in the construction of buildings in the GCC region. . This week, the company's CFO, Ms Munira Al Kaabi, has announced that the company needs to raise $0.4 million to finance the purchase of a new office in the UAE city of Khor Fakkan, Fujairah. The firm is planning to issue 11-year bonds with the QUARTERLY coupon payments. . The going market interest rate for such bonds is 4%, and the bond coupon payments will be at 6%. a. Calculate the price of these coupon paying bonds and determine whether they are selling at a premium or a discount, Why? points) (15 b. Estimate how many of these coupon paying bonds the company will need to issue to achieve their objective points) (05 c. Determine the current yield generated on such bonds (0.5 points) d. You have received an email from the CEO, Ms Munira Al Kaabi, asking you to reassess the situation, if the promised yield for such bonds is 7% instead, and the bond coupon payments are at 5%. Calculate the price of these coupon paying bonds and determine whether they are selling at a premium.ora discount. Why? (1.5 points) e. Calculate the price of the bonds in part (c) above, if they paid no coupons at all to their investors. (I point)
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