Question

In: Finance

Green bonds are bonds issued by a company to fund renewable energy projects. Kuzlon India had...

Green bonds are bonds issued by a company to fund renewable energy projects. Kuzlon India had raised financing for investing in wind power projects by issuing green bonds with 10 years as time to maturity. The green bonds were semi-annual bonds with a 10% p.a (EAR). coupon rate AAA rated. The Face value of the bonds was ₹1000. Since, these bonds enabled capital raising for projects with environmental benefits, the green bonds were issued at a premium. The yield to maturity of the bond was 8% p.a (EAR). What are the per period (semi-annual) coupon rates and per period (semi-annual) yield to maturity? What is the price of the bond today? Note: EAR is the effective annual rate

Solutions

Expert Solution


Related Solutions

Key players of renewable energy generation are assumed to be looking to implement projects to build a green power plant at the CEZ
Key players of renewable energy generation are assumed to be looking to implement projects to build a green power plant at the CEZ. One such entity, has estimated the annual costs and revenues expected from such a project as shown in the table below: Time/years Revenue/USD Cost/USD 0 $ 0 $15M 1 $5M $3M 2 $16M $1M 3 $25 M $ 0 Required Using this information, calculate the Net Present Value of the Project at a10% discount rate.                                                                           A bottom-up...
Diaz Company issued $82,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $82,000 face value of bonds on January 1, 2018. The bonds had a 7 percent stated rate of interest and a ten-year term. Interest is paid in cash annually, beginning December 31, 2018. The bonds were issued at 96. The straight-line method is used for amortization. Required Use a financial statements model like the one shown below to demonstrate how (1) the January 1, 2018, bond issue and (2) the December 31, 2018, recognition of interest expense,...
Diaz Company issued $80,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $80,000 face value of bonds on January 1, 2018. The bonds had a 6 percent stated rate of interest and a ten-year term. Interest is paid in cash annually, beginning December 31, 2018. The bonds were issued at 98. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown below to demonstrate how (1) the January 1, 2018, bond issue and (2) the December 31, 2018, recognition of interest...
Diaz Company issued $101,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $101,000 face value of bonds on January 1, 2018. The bonds had a 8 percent stated rate of interest and a ten-year term. Interest is paid in cash annually, beginning December 31, 2018. The bonds were issued at 99. The straight-line method is used for amortization. Required Use a financial statements model like the one shown below to demonstrate how (1) the January 1, 2018, bond issue and (2) the December 31, 2018, recognition of interest expense,...
ABC company issued bonds on January 1, 2006. The bonds had a coupon rate of 5.5%,...
ABC company issued bonds on January 1, 2006. The bonds had a coupon rate of 5.5%, with interest paid semiannually. The face value of the bonds is $1,000 and the bonds mature on January 1, 2021. What is the yield to maturity for these bonds on January 1, 2012 if the market price of the bond on that date is $950? (i) Describe and interpret the assumptions related to the problem. (ii) Apply the appropriate mathematical model to solve the...
Malaysia has set the policy of achieving 20% Renewable Energy (RE) by 2025. The country had...
Malaysia has set the policy of achieving 20% Renewable Energy (RE) by 2025. The country had signed the Kyoto Protocol in 1997 with the commitment of reducing carbon emissions by 40% and also to reduce Green House Gas (GHG) emissions contributions by 45% in 2030. Explain what is Renewable Energy? What are the THREE (3) advantages and TWO (2) disadvantages of using biomass energy source? Discuss the problems that arises from using hydropower as the source of renewable energy.
Wilson Oil Company issued bonds five years ago at $1,000 per bond. These bonds had a...
Wilson Oil Company issued bonds five years ago at $1,000 per bond. These bonds had a 25-year life when issued and the annual interest payment was then 9 percent. This return was in line with the required returns by bondholders at that point in time as described below: Real rate of return 3 % Inflation premium 3 Risk premium 3 Total return 9 % Assume that 10 years later, due to bad publicity, the risk premium is now 7 percent...
Green Forest Banking has issued bonds, common stock, and preferred stock. The YTM for the bonds...
Green Forest Banking has issued bonds, common stock, and preferred stock. The YTM for the bonds is 10.9 percent and the expected annual return for the common stock is 17.3 percent. Which of the following assertions about the expected annual return for the preferred stock issued by Green Forest Banking is most likely to be true? A) The expected annual return for the preferred stock is 17.3 percent B) The expected annual return for the preferred stock is 10.9 percent...
SolarTubeGen is a start-up company in the renewable energy sector. The founder of SolarTubeGen, Fritz Herzberg,...
SolarTubeGen is a start-up company in the renewable energy sector. The founder of SolarTubeGen, Fritz Herzberg, has developed cutting-edge technology to convert the energy in the sun’s rays to electricity via a novel system of mirrors designed to focus the sun’s rays onto tubes containing a patented type of gas, which then heats and expands to drive turbines. Ramirez & Walker LLP has won the contract for the first audit of SolarTubeGen on the basis of its expertise in the...
Problem 1: On January 1, Altman Company issued bonds that had a par value of $860,000...
Problem 1: On January 1, Altman Company issued bonds that had a par value of $860,000 with a stated interest rate of 5% and a 5 year maturity date. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued at 103 3/4. a) Prepare the journal entries Altman Company must record in its books at bond issuance, the first interest payment date, and at bond maturity. Altman Company uses the straight line method to amortize...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT