Engineering Board Exam Reviewer · Bonds · hard
A P50,000 bond with a coupon rate of 10% matures in 4 years. If the yield rate required by investors is 12%, find the price of the bond.
- P46,962.65
- P50,000.00
- P45,000.00
- P48,000.00
Answer
A. P46,962.65
Solution
Annual coupon =5000. Price =5000· 1-(1.12)-40.12+50000(1.12)-4 15,186.75+31,775.90 P46,962.65.
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