d. What factors determine a bond's rating? Why is the rating important to the Woolworth's CFO? (10 Marks) e. Bond ratings Assume that Woolworths recently acquired an alcohol beverage company that was in financial distress. Because of the acquisition, Mood's downgraded this Bond from Aa to Ba to reflect an increase in risks of the Woolworths Group Ltd. What impact will this have on the bond value Woolworth Ltd? Explain. (10 Marks) (please note that calculations are not required here). (10 Marks) QUESTION TWO-BONDS VALUATION (11 Marks) Sonia bought a bond when it was issued by ABC Ltd 14 years ago. The bond which has a S 1000 face value and a coupon rate equal to 10 per cent. Matures in 6 years. Interest is paid every six months; the next interest payment is scheduled for six months from today. If the yield on similar risk investments is 14 per cent, what is the current market value of the bond? QUESTION THREE-BONDS VALUATION (Woolworths Group Ltd) (8+8+8+10+10-44 marks) Key data regarding Woolworths' Bond valuation have been provided below: The required return on the Wool's Bond (Ca) Number of years (periods) to maturity (n) Par value (face value) in dollars (M) Coupon rate 490 $1,000 8% a. Caleulate the Bond's value, if interest is paid annually and justify your answer. (8 marks)