3. Aboitiz Equity Ventures issued a 7-year bond with a par value of P50,000 that pays a coupon of 8.47%. Coupon payments will be made annually. Investors required rate of return is composed of: real...

Extracted text: 3. Aboitiz Equity Ventures issued a 7-year bond with a par value of P50,000 that pays a coupon of 8.47%. Coupon payments will be made annually. Investors required rate of return is composed of: real risk free rate of 1.5%; inflation premium of 4.5%; default risk premium of 2%; liquidity premium of 1.5%; and maturity risk premium of 2%. The required rate of return would be? а. 6% b. 8% O c. 9.5% d. 11.5% 4. Using information in #3, the price of the bond would be closest to? a. B56,894.24 b. B42,974.89 C. B51,223.50 O d. 947,450.95 5. Using information in numbers 3, assume that the price of the bond is P45,000. The approximate yield to maturity would be? а. 8.47% O b. 9.41% Ос. 11.20% d. 10.41%