Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On December 30, 2020, the government had to issue debt to meet the spending needs to face the Covid 19 pandemic. The total debt issued

On December 30, 2020, the government had to issue debt to meet the spending needs to face the Covid 19 pandemic. The total debt issued in TES securities on this date was 20 million dollars and the issue was made up of 20,000 bonds. of the same denomination. The bonds have a coupon rate of 6% per year and the coupons are paid quarterly until they mature on December 30, 2027. Proteccin SA took over 28% of the total issue, but since the market interest rate has risen to 8% due to inflation, Protection considers that holding these bonds is not profitable, for this reason, it wishes to sell all of these bonds. The estimated date for the sale is April 25, 2022. Your Boss at the Protection money desk wants to know how much money they would receive in such a sale (dirty price and clean price). You want to make the calculations using cash flows and using the Excel price formula to confirm that the figure given to your Boss is correct. What values should you give your Boss assuming that the year has 360 days?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contabilidad Para No Contadores

Authors: Wayne Label

2nd Edition

9587712986, 9789587712988

More Books

Students also viewed these Accounting questions