PT Corporation has in issue 15% coupon bond with face value of GHS1,000 each and 5 years

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PT Corporation has in issue 15% coupon bond with face value of GHS1,000 each and 5 years to maturity. Coupons are paid semiannually: On 30th June and 31st December of each year. It is 17 April 2015, and the quoted price of the bond is GHS985 per each GHS1,000 face value bond. The last coupon payment occurred on 31 December 2014. Khaki Boyz Association (KBA) wants to buy 200 units of the bond today. Required:

(a) Is the bond trading at a discount or at a premium? Explain.

(b) Compute the current yield on the bond (annualized).

(c) Compute the accrued interest since the last interest payment.

(d) Compute the invoice price KBA is likely to pay for each GHS1,000 face value bond.

Posted Date: Dec 05, 2021 06:26 PM

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PT Corporation has in issue 15% coupon bond with face value of GHS1,000 each and 5 years

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Expert Answer:

1 Yes bond is trading at a discount as its market price is less ... View the full answer

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