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(a) BenBen Bhd just issued ten-year bonds that make annual coupon payments of RM50. Suppose you purchased one of these bonds at par value (RM1,000)
(a) BenBen Bhd just issued ten-year bonds that make annual coupon payments of RM50. Suppose you purchased one of these bonds at par value (RM1,000) when it was issued. Right after your purchase, market interest rates jumped, and the required return rose to six percent. What is the new price of your bond? (4 marks) (b) The RM1,000 face value ABC bond has a coupon rate of 6%, with interest paid semi-annually. and matures in 5 years. If the bond is priced to yield 8%, what is the bond's value today? (4 marks) (c) The KLM bond has a 8% coupon rate (with interest paid semi-annually), a maturity value of RM1,000, and matures in 5 years. If the bond is priced to yield 6%, what is the bond's current price? (4 marks)
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