(PLEASE READ THIS DIRECTION) Rules for Bond Valuation Problem Solving: a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value. Example: ___x 2.123456789 or 22.12345678 b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off). Example semi-annual: 13%/2 =0.065 c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers. Example: 824.59= 825

1. Assume that Greenwich and Pizza Hut have similar P100,000 par value bond issues outstanding. The bonds are equally risky. Pizza Hut bond has an annual coupon rate of 8 percent and matures 20 years from today, the nominal annual rate of return is 12%. Greenwich's bond has a coupon rate of 8 percent, with interest paid semiannually, matures in 20 years, and nominal required rate of return 12 percent on a semi-annual basis. What is the DIFFERENCE in current market prices of the two bonds?