Dominican Republique issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every four (4) months. On October 1, Hapi purchased 20 bonds at par. On May 31, she sold 8 bonds to Honey at 105-3/4. Again on September 30, Hapi sold another 6 bonds to Sweet at 96-1/2.

Required:

1. Assuming when the bond is offered to Honey, it as a remaining life of 6 years. Honey wants a 15% p.a.rate of return on her bond investment:

a. Compute for the value of each bond? How much is the total value of the bonds

offered?

b. Based on the offered price, what is the bond exact

yield to maturity?

c. Would you recommend to Honey to buy the bonds? Why?