$"1.($Total: $25$ points$)$ Environ Systems is a firm that specializes in cleaning

environmental damage $($waste disposal$)$ and specialty chemicals. As part of its

expansionary plans, it has made a large issuance of $10-$year corporate bonds, with a

face value of $$1000$ each and an annual coupon rate of $12\%.$

$($a$)(10$ points$)$ Assuming a discount rate of $7\%,$ calculate the value of the bond.

$($b$)(15$ points$)$ Environ got into deep financial troubles and defaulted on $($ie: stopped

paying$)$ its bonds in year $6.$ During that year, Environ negotiated with

bondholders on a debt restructuring deal which included extending the maturity

of the bond $2$ extra years $($ie: from $10$ years previously to $12$ years$),$ a full relief

from coupon payments in years $7$ and $8,$ a payment of coupons at a reduced rate

of $3\%$ per annum from years $9$ to year $12,$ and a repayment of $70\%$ of the face

value in year $12.$ Under such conditions and assuming a discount rate of $7\%,$

what would the value of the bond be$?$ What would the bondholder$$s profit$/$loss

be relative to the face value of the bond?"

I understand how to get the answer to part a$,$ but I am extremely stuck on what to do for part b