B) a) On January 1, 2009, CSUC United had outstanding a bond with a face value of $1000. At the end of each year this bond pays investors $91.25 in interest. The bond matures at the end of 2019, eleven years from now. Assume that CSUC United has in issue 500,000 $1 ordinary shares whose current ex-dividend market price is $1.50 per share. CSUC United has just paid dividend of 27p per share and the dividends are expected to continue at this level for some time. If CSUC United has no debt capital, what is the weighted average cost of capital? NOTE: Use the weighted average cost of capital as the discount rate of the bond. Calculate: The present value of the bond; (4marks) The present value of principal; (4marks) The current market price of the bond; (4marks) Does this bond trades at premium or discount? Explain (4marks) The coupon yield. (4marks) 1. 11. 111 IV. V. A Page 2 of 5 BODO MacBook A