Pretika Holdings Berhad is a property developer company in Malaysia, due to high demand of property, the company has dec

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Pretika Holdings Berhad is a property developer
company in Malaysia, due to high demand of property, the company
has decided to build up a new township which located at Bangi. The
project’s estimated cost is RM750 million and they were planning to
finance using debt which by issuing bond. The bond has a par value
RM1,000 with 10 percent coupon rate and will mature in 10 years.
Dr. Keertan is a retail investor and he has decided to buy the
bond.
Calculate the value of bond (Vb) if the required rate of
return is 8 percent.
(5
marks)
Determine the new value of bond (Vb) if the market
rate has increased to 12 percent.
(5 marks)
Define Yield to Maturity (YTM) in bond
investment.
(3 marks)