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Healthy You Limited is major player in the health sector. The company recently implemented a project to reduce its costs and increase its competitiveness.
Healthy You Limited is major player in the health sector. The company recently implemented a project to reduce its costs and increase its competitiveness. The project was financed by issuing new debt. On January 1, 2019, the issued new bonds which will mature on December 31, 2043. The bonds have a par value of $1,000 and a coupon rate of 9%. Coupon payments are made semi-annually. I. II. III What would be the value of the bonds on December 31, 2022, if the interest rates had risen to 16%? Based on the price of the bond, how would you classify the bond? (9 Marks) What would be their value on June 30, 2029, if interest rates had fallen to 8%? Based on the price of the bond, how would you classify the bond? (9 Marks) If the bonds had a value of $1,045.00 on January 1, 2029, what would be their yield to maturity on that date? (7 Marks)
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