Question 4 (17 marks) Evergrande Group issued $100 million face value bonds on January 1, 2012. The bonds carry a coupon

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Question 4 17 Marks Evergrande Group Issued 100 Million Face Value Bonds On January 1 2012 The Bonds Carry A Coupon 1 (63.91 KiB) Viewed 57 times

Question 4 (17 marks) Evergrande Group issued $100 million face value bonds on January 1, 2012. The bonds carry a coupon rate of 6% with annual coupon payment. The bond matures on January 1, 2022. a) Determine the market value of the bond issued on January 1, 2012, if it was priced to produce a yield (YTM) of 10% compounded annually on that date. [Note: Round your final answer to 2 decimal places) (5 marks) b) Assume the bond is sold on January 1, 2013, with an increase in the yield of 1% to 11% compounded annually on that date. Calculate the (i) Current yield (on Jan 1, 2012) (ii) 1-year Yield on capital gain/loss (iii) 1-year Holding period yield [Not d your final answer to two decimal places] (12 marks) A