Question: Brymo Ltd issued bonds two years ago that pay interest on an annual basis at 8 per cent. The bonds are due for repayment in

Brymo Ltd issued bonds two years ago that pay interest on an annual basis at 8 per cent. The bonds are due for repayment in two years' time. They will be redeemed at $110 per $100 nominal value. A yield of 10 per cent is required by investors for such bonds. What is the market value of the bond now and after 1 year. What is the current yield of the bond. Comment on your answer.

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