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QUESTION 4 (CLO 4) Lahey Industries has an outstanding of RM1, 000 par value bond with an 8% coupon interest rate. The bond has 12
QUESTION 4 (CLO 4) Lahey Industries has an outstanding of RM1, 000 par value bond with an 8% coupon interest rate. The bond has 12 years remaining to its maturity date. Required: a) If interest paid annually, find the value of the bond when the required return is (i) 7%, (ii) 8%, and (iii) 10%. b) Indicate for each case in part (a), whether the bond is selling at a discount, at a premium, or at its par value. c) Using the 10% required return, find the bond's value when interest is paid semi annually. (15 marks)
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