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a) Georgia Bhd intends to issue a new 8-year bond at 6% coupon rate. The market values the current selling price of the bond at

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a) Georgia Bhd intends to issue a new 8-year bond at 6% coupon rate. The market values the current selling price of the bond at $1120. Compute the yield to maturity of the bond. Par value of the bond is $1,000 and the bond pays semi-annual coupon payments. (8 marks) b) Silo Bhd bonds carrying 8% coupon payment have 10 years left to maturity. The bonds have a par value of $1,000 and Silo Bhd makes semi-annual payments. If the YTM on these bonds is 9%. Calculate the value of the bond. (6 marks) c) Explain two main differences between premium and discount bonds. (6 marks)

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