try to solve it-2

Harish (CS Executive) (386 Points)

26 November 2009  

A company invested in a 5 year bond issue of another company in 2000 carrying a coupon rate of 10% per annum. The interest payable at half-yearly rates and the principal repayable after 5 years in 2004 end. The current market yield has fallen to 9% during 2001. The investor company wanted to take advantage of the fall in market yiel;d by selling the bond to any willing buyer. Compute the value of the bond at the end of 2001.

 

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