Q. NO. 01 :

Kohinoor Industries is planning to issue 11.25% corporate bonds for 5 years to meet financing requirement. It had already been decided in the board meeting that 50,000 bonds would be issued. Each bond will be issued @ Rs. 1,120 which is market competitive price. Required rate of return is assumed to be 10.5%

Answer the following questions :

1. What will be the yield-to-maturity if you decide to purchase this bond.
2. Based on your calculation, say if you would purchase this bond.
3. How much will be your current-yield on this bond?

What will be your total rate of return if you decide to sell this bond after a year for Rs. 1500 in the market.