ABC Ltd. s bonds have the following attributes-

Par value: $100

Coupon interest rate:10%

Interest payment: annually

Years remaining to maturity date: 12

a. Find current sales value of ABC Ltd s bonds if bonds of similar risk are currently earning 8% p a (5)

b. Justify how a similar risk bond is earning a return (8%) below the coupon interest rate (10%)? (5)

c. Calculate the current value of ABC s bonds if the required return was 10% and not 8% (5)