Question 23

The South African company situated in Cape Town needs capital to kick start a new project which is believed to be very profitable. The only challenge the company faces is the lack of funding. The directors have then agreed that the firm issue twelve-year bonds, which are currently trading at par. The agreed coupon interest rate is 11% paid two times a year to the bondholders. Find the value of a bond

• A. R900.00
• B. R1000.00
• C. R1100.00
• D. R1150.00