$($a$)$ Emilia is the Financial Analyst at Megah Jaya Company. She is

considering two investment alternatives. The following information is

given:

Compute value of bond $(Vb)$ for each investment alternative and

decide which of investment alternative that should she choose.

Megah Jaya Company's required rate of return is $12$ percent.

$(10$ marks$)$

$($b$)$ Tilagam Textiles Berhad wishes to issue new bonds but currently the

market would set the yield to maturity. The bonds would be $20$ years

maturity, $7$ percent coupon bonds with a RM$1,000$ par value. Tilagam

has determined these bonds would sell for RM$1,050$ each. Calculate

Yield to Maturity $($YTM$)$ for these bonds.

$(9$ marks$)$

$($c$)$ Zafril Berhad has issue preferred share at RM$100$ per share which

pays a constant dividend of RM$7$ per share and required rate of return

is $9$ percent. Calculate the value of preferred share.

$(2$ marks$)$

$($d$)$ Zigzag Company paid dividend RM$2$ per share for their common

share last year. The dividend expected to grow steadily at $8$ percent

and required rate of return is $16$ percent. Calculate the current market

price for the share.

$(4$ marks$)$