Question
You are interested to buy a coupon bond that pays an interest of 10% and bears a face value of Rs. 1000 and will mature
You are interested to buy a coupon bond that pays an interest of 10% and bears a face value of Rs. 1000 and will mature in 10 years. Market is equating this bond with a perpetual bond that bears a face value of Rs. 1000 and pays an interest of 12% and is at present selling for Rs.750 per bond.
Required:
- What value you should place on your Coupon Bond today?
- What will be this bond value after 1 year?
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
8th Edition
0324258917, 9780324258912
