Question 4 The Harith Electronics Company has an outstanding issue of bond with a par value of RM1,000, paying 12 percent coupon rate semi-annually. The bond was issued 25 years ago and has 5 years to maturity. What is the value of the bond assuming 14 percent rate of interest? What will happen to value/price as the bond approaches maturity? (4 marks] Mr. Ali recently purchased a block of 100 shares of Belalang Corporation common stock for RM6,000. The stock is expected to provide an annual cash dividend of RM400 indefinitely. Assuming a discount rate of 8 percent, how much more did Mr. Ali pay for the stock? [3 marks] The Cold Heat Company has been very successful in the past four years. Over these years, it paid common stock dividend of RM4 in the first year, RM4.20 in the second year, RM4.41 in the third year, and its most recent dividend was RM4.63. The company wishes to continue this dividend growth indefinitely. What is the value of the company's stock if the required rate of return is 12 percent? (4 marks] d. You are looking at the following two bonds: Bond M RM1,000 RM62.50 Bond N RM1,000 RM67.50 Face Value Annual Coupon Years to Maturity Price 14 RM1,047.20 If these bonds are identical, except for the coupons and prices, i) What is the return on Bond M? ii) What is the price of Bond N? [8 marks]