Fun-well Limited issued a semi-annual bond with a par value of $ 36,000, coupon rate of...

Fun-well Limited issued a semi-annual bond with a par value of $ 36,000, coupon rate of 8% p.a. and a maturity period of 15 years.

Required:

Create a model showing the interest and principal repayment separately, and calculate the value of the bond when the required rate of return is 10% if:

Interest is paid annually.
Interest is paid semi-annually.
What would be the value of the bond when the required rate of return is 12%, interest paid semi-annually and with a maturity of 8 years?

Solutions

Expert Solution

jeff jeffy answered 1 year ago

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