Question
PRINCIPLE OF FINANCE Perkasa Corporation Berhad is a construction company specializing in building high endresidential property in Klang.The company is expanding its' business and would
PRINCIPLE OF FINANCE
Perkasa Corporation Berhad is a construction company specializing in building high endresidential property in Klang.The company is expanding its' business and would like toissue 100 bonds with par value of RM1,000 each with a coupon rate of 9 percent.Thebonds will be matured12yearsfromnow.
Basedontheaboveinformation,youarerequiredto:
a.calculatethetotal valueofthe bondiftherequiredreturnis 7percent. (2Marks)
b.calculate thetotal valueofthebondiftherequiredreturnis 11percent. (2 Marks)
c.explaintherelationshipbetweencouponrate,requiredrateofreturn,marketvalueandtheparvalue ofthebondin relationtopart(a)and (b)ontheabove.
(6Marks)
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Step: 1
Here are the answers a Calculate the total value of the bond if the required return is 7 To calculate the present value of the bond we need to calcula...
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
