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a. Excel Courier (Gh.) Ltd. has an 8% bond making semi-annual payments. The bond has a face value of GH1,000 and has 13 years to
a. Excel Courier (Gh.) Ltd. has an 8% bond making semi-annual payments. The bond has a face value of GH1,000 and has 13 years to maturity. Aseda Co. Ltd. has just issued a 10-year 10% coupon bond making annual payments. The bond has a face value of GH1,000. What is the value of the two bonds to an investor whose required rate of return is 9% (2 marks) b. Ghana Cocoa Limited has a 6 percent coupon bond outstanding. Ghana Bauxite Ltd has a 14 percent bond outstanding. Both bonds have 8 years maturity and make semi-annual payments. i. How much should an investor who has a required rate of return of 10% pay for GH10,000 worth of each bond? (2 marks) ii. If the interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (2 marks)
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