Question: Looking for manual workings using formulas.. no need excel version Question 6 a) On 1 January 2017 Inferno Bhd issued a bond with 15 years
Question 6 a) On 1 January 2017 Inferno Bhd issued a bond with 15 years to maturity. Inferno Bhd's bond has an annual coupon of RM3,240 and a face value of RM40,500 paid at maturity in 15 years. Similar bonds have a yield to maturity of 8 percent. What would this bond sell for? (4 marks) b) Supposed that in 2018 the interest rate has risen from 8 percent to 10 percent. Inferno Bhd's bond has nine years left to maturity. Determine the worth of the bond. (4 marks) c) What happens if in 2018, interest rate dropped by 2 percent from 8 percent. Inferno (4 marks) Bhd's bond still has nine years left to maturity. Determine the worth of the bond
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
