Question 1: Bond Valuation (20 marks) Lend Lease Ltd is planning to issue 7-year bonds with semi-annual coupon payments. The market interest rate for such bonds is 8%. Coupon payments will be made at a rate of 9.17%. The management of Lend Lease Ltd has determined the company needs to raise $875,000 to fund the purchase of a new office and wants to use the proceeds of the bond issue for that purpose. i) Calculate the price of these 9.17% coupon bonds. (8 marks) ii) State and explain whether these bonds are premium or discount bonds. (2 marks) iii) How many of these 9.17% coupon bonds would the company issue? (3 marks) Calculate the price of these bonds, if they paid no coupons to investors. Assume semi- annual compounding for these zero-coupon bonds. (4 marks) v) How many of the zero-coupon bonds would the company need to issue? (3 marks) (Total = 20 marks)