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a. Laksa Penang Berhad has bonds on the market making annual payments, with 13 years to maturity, and selling for RM1,045. At this price, the

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a. Laksa Penang Berhad has bonds on the market making annual payments, with 13 years to maturity, and selling for RM1,045. At this price, the bond yield 7.5%. Compute the coupon rate be on this bond. (5 Marks) b. Laksa Johor Berhad issued 11 -year bonds a year ago at a coupon rate of 7%. The bond makes semi-annual payments. If the YTM on these bonds is 8%. Calculate the price if this bond today. (5 Marks) c. Asam Laksa Berhad just paid a dividend of RM1.25 per share on its common stock. The dividends are expected to grow at 28% for the next eight years and then level off to a 6% growth rate indefinitely. If the required rate of return is 13%, find out the price of the common stock as of today. (4 Marks) d. Asam Pedas Berhad, is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to low back its earnings to fuel growth. The company will pay a RM10 per share dividend in 10 years and will increase the dividend by 5% per year thereafter. If the required rate of return on this common stock is 14%, determine the current price of the common stock. (6 Marks)

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