Suppose you purchased an Amazon Inc. bond with the following features six years ago now selling for $$935.$ The bond paid $$100$ per year in coupon interest on the last day o each year, the last payment made today.

Maturity

$10$ years

Coupon rate

$10\%$

Coupon frequency

yearty

Face Value at Maturity

$$1000$

Issue Price

$$900$

You intend to hold the bond for $4$ more years, i$.$e$.,$ till maturity of the bond. You also project that the bond will continue paying $$100$ in annual interest. Given the risk associated with the bond, its required rate of return $($r$)$ over the next four years is $11\mathrm{.}25\%.$

Please determine the fair present value of the bond and comment whether the bond is over$-$value or under$-$valued at present and to what extent