question 2

(i)Sinar Systems has an outstanding issue of RM1,000 par value bonds with a 12 percent coupon interest rate. The issue pays interest semi-annually and 15 years remaining to its maturity date. If the bonds have 10 percent rate of return, how much should the Sinar Systems bond sell for today?

(ii)) Midland Utilities has outstanding a bond issue that will mature to its RM1,000 par value in 12 years. The bond has a coupon interest rate of 11 percent and pays interest annually. Find value of the bond if the required rate of return is 15 percent.

(iii)) Nadayu Bhds share dividend at the end of this year is expected to be RM 2.50 per share and it is expected to grow at 11 percent in perpetuity. If the required rate of return is 15 percent per year, compute the value of common share.