Bond, Stock Valuation and Foreign Exchanges You work in an investment firm that helps clients invest their money. A fintech company has come forward to raise funds for their expansion in the regional Southeast Asia markets. They specialise in lending to small and medium enterprises (SMEs). They are proposing to sell bonds or equity to you. Below are the terms: Bond Price: $95 Par value: $100 Settlement date: 1 Jan 2023 Maturity date: 1 Jan 2031 Annual coupon rate: 6.0% Coupons: Semi-annual payment Day count basis: Actual/365 (a) Compute the Yield to Maturity (YTM) for the bond. (5 marks) (b) Using modified duration, estimate the price of bond if global interest rates were to rise by 0.5%. Assume YTM to rise by the same amount of global interest rates. (5 marks) Equity Latest earnings per share: $2 Dividend payout ratio: 50% Last dividend paid: $1 Expected earnings growth for next 5 years: 8% per year Expected earnings growth for 6th year onwards: 4% per year Required Rate of return: 7.0% (c) Compute the price for each share. (5 marks) (d) Write a report to evaluate these 2 instruments above and recommend to your company merits and demerits of each instrument for investment purpose. In addition, take into account the following current environment: Global interest rates are on the rise. Slowdown in global economy (Word limit: 300 words) (15 marks)