Bond Valuation HFC has outstanding a 10 percent bond issue with a face value of GHS1,000 per bond and three years to maturity. Interest is
Bond Valuation
- HFC has outstanding a 10 percent bond issue with a face value of GHS1,000 per bond and three years to maturity. Interest is payable annually. The bonds are privately held by SIC. SIC wishes to sell the bonds and is negotiating with another party. If the yield to maturity of the bond is 14 percent.
a. What price per bond should SIC be able to realize on the sale?
b. Calculate the duration and modified duration of the bond.
c. If interest rates fall by 2% what will the new price of the bond be?
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Authors: Bryan Bergeron
1st Edition
0471220779, 978-0471220770
