Compute the bonds expected rate of return determine the


Mad Co has a 10-year, RM 1,000 par value bonds that pay 8% interest annually. The market price of the bonds is currently RM 1,125. Suppose your required rate of return is 10%.

a). Compute the bond's expected rate of return.

b). Determine the value of the bond to you, given your required rate of return.

c). Should you purchase the bond?

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