A bond has a nominal (par) value of IDR 100,000,000 and matures in 5 years. The obligation is to pay interest semi-annually (every 6 months) with an annual coupon interest rate of 8%. The expected annual rate of return (rd) for a bond of similar risk that also pays semiannual interest is 10%. Question: Calculate the valuation of the bond! And conclude your

Answer rating: 100% (QA)

To calculate the valuation of the bond we will use the bond pricing formula which is based on the present value of the bonds future cash flows consisting of the coupon payments and the face value of t... View the full answer