Bina Bina Berhad is a construction company located in Petaling Jaya and is listed in Bursa Malaysia. The entire revenue for the current fiscal year for the company was RM$12\mathrm{.}5$ million. The Kuala Lumpur composite index returns are $9\%,$ while the predicted risk$-$free interest rate in the current environment is $2\mathrm{.}0\%.$ Bina Bina Berhad anticipates that their business will keep growing in the future. The company's beta value, indicating its strong rate of growth, is $1\mathrm{.}25.$

The company's capital structure consists of $40\%$ long$-$term debt. There will be $10\%$ preferred stock and $50\%$ common stock The description of capital structure for Bina Bina Berhad is as follows:

Common stock:

Cash dividend payments and$/$or price fluctuations are the sources of common stock returns. While investors who get dividends are generally expecting them to increase over time, certain stocks do not pay dividends, especially in their early growth years. As a company grows, it usually starts to pay dividends, and management is very reluctant to cut the payout. Since companies that do not pay dividends are typically thought to keep earnings in order to foster growth, the stock price should increase more quickly than that of companies with large payout ratios. The payout percentage for Bina Bina Berhad is $45\%.$

There are presently $4$ million shares of RM$2\mathrm{.}50$ par value outstanding of Bina Bina Berhad's common stock. Common stock presently trades for RM$25$ per share. The dividend growth rate of the corporation is anticipated to be $25\%$ in the next year, followed by $20\%$ in the second year and $10\%$ in the third. It is anticipated that the dividend will increase every year after that at a steady pace of $7\%.$ It is anticipated that the payout ratio of the corporation would remain unchanged. Preemptive rights are not granted to the common shares.

Investors in Bina Bina Berhad have the opportunity to purchase additional shares of common stock with cash purchases or through automatic dividend reinvestment. Under this scheme, investors can buy back more shares at market value and reinvest their dividends in common stock. Participants in this plan are restricted to purchasing a maximum of RM$1,000$ worth of extra shares each month. Preferred Stock:

In April $2023,$ Sintok Alam Holding Company merged to become a Bina Bina Berhad subsidiary, resulting in the issuance of almost $2\mathrm{.}4$ million shares. The preferred stock is now trading at RM$20,$ with a dividend of RM$1\mathrm{.}25.$ There are no voting rights for the preferred stock.

Bond:

An $7\%$ coupon rate bond due in $15$ years is one of the two largest long$-$term debt issues. This bond is currently on the market for RM$1050.$ The other large publicly traded bond is a $12-$year $8\mathrm{.}5\%$ coupon bond with semi$-$annual interest payment. This bond is being sold for RM$900.$ Rating Agency of Malaysia $($RAM$)$ has assigned an A rating to both of these bonds. The bonds have par value of RM$1,000.$

QUESTIONS:

Examine the bond with a $7\%$ coupon. What are its yields to maturity and current yields?

What do you believe the name of this bond$-$a $7\%-$coupon bond$-$will be$?$ Give an explanation for your response.