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Calculating total rate of return on bond

1) Let the bond paying coupon rate of= 10.50% per year semi-annually when market interest rate is only= 4.2% per half-year. Bond has 2 years until maturity.

a) Determine the bond's price today and 4 months from now after next coupon is paid. Compute the present price and Price after four months

b) Calculate total rate of return on bond?

2) A small company has effectively grown over years to point where it is taking into account for becoming a openly listed corporation. Write down the processes which are involved in flotation (IPO) of a business on a stock exchange.

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## Q : Determining the profitability index

A company is planning the expansion. Initial investment is $480,000 and anticipates cash inflows as given below. The cost of capital is 12.2%. Determine the profitability index and should the firm go ahead with project?