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A company issued a bond in 30 June of year N. You have the following information about this bond: it was issued at par
A company issued a bond in 30 June of year N. You have the following information about this bond: it was issued at par (50); it has an interest rate of 6%; it will be repaid in 30 June of N+5 and the annual coupon is paid in 30 June each year. On 2/01/N+2 an investor decided to buy this bond. Consider that the YTM for bonds with equivalent risk is 8%. Assume that each month has 30 days. Requests: 1. Calculate the theoretical value of the bond in 2/01/N+2. 2. Calculate the theoretical value of the bond in 2/01/N+2, assuming the following change regarding the repayment of the bond: the repayment is done at par, by change, half of the bonds in 30/06/N+4 and the remaining in 30/06/N+5.
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