Question
QUESTION THREE a. The Kenya Government has issued a 20-year bond with a par value of Ksh 6000 with an annual coupon payment. The return
QUESTION THREE
a. The Kenya Government has issued a 20-year bond with a par value of Ksh 6000 with an annual coupon payment. The return on other bonds of similar risk is currently 12%. The Kenya Government decides to offer a 12% coupon interest rate.
REQUIRED
What would be a fair price for these bonds?
- Suppose interest rates rise immediately after treasury issued the bonds to 14%, but this time bond has semi-annual payments.
REQUIRED
Calculate the price of the bonds
- Imagine you paid Ksh 50.80 for a Ksh 100 bond that has 10 years left to maturity
REQUIRED
Determine your yield to maturity
- Suppose we paid Ksh 89,890 for a Ksh 100,000 par 10% bond with 8 years to maturity and annual coupon payments
REQUIRED
Calculate the bonds yield to maturity
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Multinational Financial Management
Authors: Shapiro A.C.
9th International Edition
8126536934, 9788126536931
