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Please show all work and provide a brief explanation of how you analyzed the situation. Diana Voorman, portfolio manager at Gigantico Inc. is looking at

Please show all work and provide a brief explanation of how you analyzed the situation.

Diana Voorman, portfolio manager at Gigantico Inc. is looking at two different bonds and intends to purchase only one of them for her firm's intermediate bond portfolio.

The first bond is from The Zelio Film Company. The ask price is 93.25 firm. The bond was issued on February 15th, 2017 and matures on February 15th, 2027. The bond has a coupon rate of 7.50% payable on a semiannual basis. The face value of the bonds is $10,000 and the required rate of return for similar bonds is 8.28% as determined by Diana's investment committee. If purchased, the bond would settle on May 1st, 2017.

The second bond is from Xenix Motion, Ltd. The ask price is 102.50 firm. The bond was issued on November 15th, 2010 and matures on November 15th, 2025. The bond has a coupon rate of 9.25% payable on a semiannual basis. The face value of the bonds is $10,000 and the required rate of return for similar bonds is 9.10% as determined by Diana's investment committee. If purchased, the bond would settle on May 1st, 2017.

Analyze both bonds and calculate their respective intrinsic values. Use the Excel "Formulas" then "Financial" drop down menu, use the PRICE function to solve for the intrinsic value.

With the expected settlement date of May 1st, 2017, calculate the amount of accrued interest that Gigantico would pay upon acquiring either bond. Alas, the Excel function here requires manipulating the date format and a workaround, so the recommendation is to manually calculate being aware of the "Basis" information and when the bond was issued, or last paid interest.

Evaluate the bonds and determine the yield to maturity of both bonds based on the current price for the bonds.

Analyze the two bonds to determine if one offers greater value to Gigantico than the other and explain. You may disregard the accrued interest as bond purchasers generally consider the accrual as rather inconsequential.

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