DO Question 1 Cesar Milan Ltd's 12-year $1,000 par bonds pay 12 percent interest. Your required rate of return is 11 percent. The current market price of the bond is $1,100. Determine the expected rate of return of the bond. (0) () What is the value of the bond to you given your required rate of return? (4) (10) Should you purchase the bond at the current market price? (2) Question 2 CIMB has an outstanding issue of $1,000 par value bonds with a 12% coupon interest rate. The issue pays interest annually and has 16 years remaining to its maturity date. If bonds of similar-risk are currently earning a 10% rate of return, how much should the CIMB bond sell for today? (4) If the market price of this bond is currently selling at $1080, what would be your investment decision? 121 Question 3 Djura Limited issues 15-year $1,000 bonds that pay 8 percent interest semi-annually. The market price for the bonds is $960. Your required rate of return is 9 percent. Compute the bond's expected rate of return. (5) Determine the value of the bond to you. (5) il. Should you purchase the bond? (3) United States Focus MacBook Air 80 .. F IL FS FB FO A * - $ 4 % 5 6 & 7 8 9 0 E R T Y U o