Question: ABC Limited has two different bonds currently outstanding. Bond x has a face value of R 1 0 0 0 0 0 and matures in
ABC Limited has two different bonds currently outstanding. Bond has a face value of R and matures in years' time. The coupon rate on the bond is Coupons are paid semiannually in arrears.
Bond also has a face value of R and a maturity of years; it makes no coupon payments over its year life. The yield to maturity YTM on both bonds is per year, compounded semiannually.
Required:
What is the maximum amount that a rational investor would pay for each of these bonds? Round off your answers to two decimal places.
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