A client is interested in two investments $-$ an offshore bond and shares in a local company.

The client's opportunity cost is $12\%[$this means that the client can make $12\%$ on other investments$].$ Assume the EURO: Rand exchange rate is EUR $1$:R$15$ throughout the period of the bond. The dividend for the share is the expected dividend at the end of year one $($D$1)$ and not the current dividend $($D$0).$

$\backslash$table$[[$Conditions$,$BZA Bond,XTY Ltd $-$ Shares$],[$Total nominal value,EUR $8500000,],[\backslash$table$[[$Total market value of shares$],[(100000$ shares x R$1000],[$price per share$)]],,$R$100000000],[$Market value of the bond,R$100000000,],[$Coupon $($fixed$),7\%,],[$Interest payments,$\backslash$table$[[$Interest is paid out on the$],[$bond each year$]],],[\backslash$table$[[$Dividends per share per$],[$annum shares