Reference no: EM132787185

Marco Bond is a billionaire who wants to invest some of its petty cash in corporate bonds. You, as the hired financial planner of Marco, suggested the following bonds who all have a yield to maturity of 10% and matures in 15 years:

PCOR - 8% annual coupon rate; P1,000 face value
PGOLD - 10% annual coupon rate; P1,000 face value
PSE - 12% annual coupon rate; P1,000 face value

Problem 1.) Determine the Current Yield of PSE.

a. 9.44%

b. 11.23%

c. 10.00%

d. 10.42%

Problem 2.) If Marco Bond is interested in the periodic income from the bonds, between PCOR and PGOLD which is better?

a. PCOR because it has a greater current yield than PGOLD

b. PCOR because it has a lesser current yield than PGOLD

c. PGOLD because it has a higher current yield than PCOR

d. Indifferent since both of them has the same yield to maturity rate