Your company needed R5 million for expansion purposes. You decided to issue semi-annual R1 000 bonds which pay a coupon of 10% for a 15-year period. A year after the bonds were issued, the interest rate in the market increased to 11.5%.

REQUIRED:

a) What was one bond worth one year after it was first issued? R Blank 1. Fill in the blank, read surrounding text. b) If your company issued 1 500 bonds at par in the first year, how many would you still have to sell at the new present value at the end of the first year? Blank 2. Fill in the blank, read surrounding text.