Use the informaiton from the image to get the rates and terms to be used to form the DCF$.$

Task:

Value a floating rate hybrid issued by US Utility PPL using a discounted cash flow $($DCF$)$ model. You will find the terms and conditions of the bond in the next tab.

Steps:

$1.$ Review Terms & Conditions: Begin by thoroughly reviewing the terms and conditions provided for the bond issued by PPL$.$

$2.$ DCF Model Construction: Construct a DCF model to estimate the present value of the bond's cash flows. Consider the bond's unique features such as its floating interest rate, reset frequency, and callability.

$3.$ Rate Paths Analysis: Utilize the various potential rate paths provided in tab $3$ to value the bond. Ensure that your model can handle multiple rate scenarios, and you don't have to restrict yourself to the the rates scenario provided. You can use a Monte Carlo simulation.

$4.$ Bond Callability Assessment: Take into account the bond's callability. Analyze how different rate paths might influence the issuer's decision to call the bond and how this might impact the attractiveness of the investment case.

Written Analysis:

Once you have completed the valuation, compose a paragraph detailing your conclusions. Your analysis should cover the following points:

$-$ Valuation Results: Discuss the valuation outcomes based on different interest rate scenarios.

$-$ Callability Commentary: Provide insights on why and under which scenarios the company would likely call the bond or choose not to call it$.$ Make sure to support your reasoning with evidence from your valuation.

Formatting:

$-$ Use clear and concise language.

$-$ Ensure your DCF model is neatly formatted and easy to follow.