A company issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every four (4) months. On October 1, Sandy purchased 20 bonds at par. On May 31, she sold 8 bonds to Tony at 105-3/4. Again, on September 30, Sandy sold another 6 bonds to Tim at 96-1/2.

Required:

1. Assuming when the bond is offered to Tim, it has a remaining life of 4 years. Tim required rate of return for his bond investment is 18% p.a.:

1. Compute for the value of each bond? How much is the total value of the bonds offered?
2. Based on the offered price, what is the bond approximate and exact yield to maturity?
3. Would you recommend to Tim to buy the bonds? Why?