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a) Based on information below, compute the value of the Bond. (5 marks) PAR VALUE: RM1 1000 COUPON INTEREST RATE: 12% MATURITY DATE: 16 YEARS(ANNUALLY)
a) Based on information below, compute the value of the Bond. (5 marks)
PAR VALUE: RM1 1000
COUPON INTEREST RATE: 12%
MATURITY DATE: 16 YEARS(ANNUALLY)
REQUIRED RETURN ON BOND: 8%
b) Compute the value of a bond maturing in 9 years, with a RM1, 000 par value and a coupon interest rate of 12% paid semiannually. The required rate of return of the bonds is 16% paid semiannually.
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