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Mrs. Linda, CFA, is a fixed income analyst. She is currently analyzing three bonds (Bond A01, Bond B02, and Bond C03). She strongly believes that

Mrs. Linda, CFA, is a fixed income analyst. She is currently analyzing three bonds (Bond A01, Bond B02, and Bond C03). She strongly believes that the appropriate market bond yield is 8 percent per annum. She documents the following information:

Bond A01 Bond B02 Bond C03
Face value (IDR) 500000000 1000000000 2000000000
Issued 1-July 2020 1 July 2020 1July 2020
Maturity 1 July 2030 1 July 2040 1 July 2050
Coupon Rate 6 % 8% 10%
Coupon Payment Quarterly Semi anuall anuall
Price (IDR) 420000000 985000000 2500000000

Mr. Dimas, CFA, is a security analyst. He is currently analyzing three shares (ABC007, DEF008, and XYZ009). He strongly believes that the appropriate required rate of equity return is 13 percent per annum. He documents the following information:

ABC007 DEF008 XYZ009
Just Paid Devidend (IDR) 1000 500 0
First Devidend Growth 3% 10% 0%
Second Devidend Growth 3% 5% 0%
First Growth Years 1 to 5 1 to 3 N/A
Second Growth Years 5 to 100 4 to 10 N/A
Price (IDR) 15000 3000 6700

Questions:

1). Evaluate the potential mispricing of those three bonds!

2). Explain further consideration when Linda attempts to value those bonds!

3). Evaluate the potential mispricing of those three shares!

4). Explain further consideration when Dimas attempts to value those shares!

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