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You are newly hired consultant for MZ Sdn Bhd. You are required to analyze the debt securities of the organization. The firm has outstanding

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You are newly hired consultant for MZ Sdn Bhd. You are required to analyze the debt securities of the organization. The firm has outstanding loans and bonds. A review of the Statement of Financial Position shows the following: Liability Amount Nominal Interest Years to Maturity (RM) (coupon) Rate Selected Liabilities of the firm Simple Loans 800 5% 1 Fixed-Payment Loans 5,000 12% 19 Long-term Bonds #1 500,000 10% 4 Long-term Bonds #2 1,080,000 10% 10 Liabilities Total Market Price for Bond #1 1,585,800 930.50 Market Price for Bond #2 Face Value of Each Bond 859.50 1,000.00 Selected Current Assets of the firm Market Securities Treasury Bills 100,000 Note: Treasury Bills have a RM 10,000 face value, which matures in one year. Each Treasury Bill has cost of RM9,580.00 Required: a. How much interest would the firm pay each year on the simple-interest loan? b. How much would you write a check for to pay off the loan in one year? c. What is the monthly payment needed to pay off the fixed-payment loans? d. What is the current yield for each bond if the current price is: i. RM930.50 for Bond #1 ii. RM859.50 for Bond #2 Level: III (10 marks) e. Identify and discuss briefly the factors that influence the market value of traded bonds. Level: II (10 marks)

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