Question
A development company has issued a 5 years corporate bond for $100,000 to raise money for a new project. The bond has annual dividends of
A development company has issued a 5 years corporate bond for $100,000 to raise money for a new project. The bond has annual dividends of $15,000 per year. And as usual, the bond holder will be paid the face value of the bond at maturity. The bond currently sells for a 10% premium.
a) What is the ROR for the bond?
b) If a potential investor has a MARR of 12% will this be a good bond to buy at the 10% premium?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
978-0538453257
