1. What is the net issue price less discounted rate? 2. What is the current yield based on the net issue price less discounted rate in no.1? 3. Compute the NPV using i=10%? 4. Compute the NPV using i=12%? 5. Determine the yield to maturity of the new bond assuming the interest is payable on a yearly basis.

B. Orient Express Bhd has successfully secured a new project in Nusa Jaya. Mr. Johnny, a Finance Director, proposes to issue 100,000 units of a new bond at net issue price less discounted value to finance the project. The discount rate is estimated to be 5% of the par value. The new bond, which has a par value of RM1,000, and a ten-year maturity period, will pay a 10% annual coupon. Recently, the company received a rating AA from Malaysian Rating Corporation Bhd on the bond issued. Required: i) Determine the yield to maturity of the new bond assuming the interest is payable on a yearly basis. (4 marks)