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a) Dato Kiritika has recently inherited RM200,000 and is considering purchasing 180 bonds of the SP Setia Corporation. The bond has a par value

 



a) Dato Kiritika has recently inherited RM200,000 and is considering purchasing 180 bonds of the SP Setia Corporation. The bond has a par value RM1,000 with 10 percent coupon rate and will mature in 10 years. Calculate the value of bond and justify whether Dato Kiritika has enough money to buy the 180 bonds if the required rate of return is 9 percent. wwwwwwww (5 marks) b) SM Corporation will pay an annual dividend of RM2.50 a share on their common stock for this year. The company wishes to increase the dividend by five percent every year for the next five years. Calculate one share of this common stock be worth five years from now if the applicable discount rate is 10 percent. (5 marks)

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