Charlie Corporation is a chemical company. The company issued an outstanding bond with a P100,000 par value at 15-year maturity date. The coupon rate is 8%, and interest is paid quarterly. The required nominal interest rate on this borrowings has now increased to 16 percent . What is the current market value of the bond?
(PLEASE READ THIS DIRECTION)
Rules for Bond Valuation Problem Solving:
a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.
Example: ___x 2.123456789 or 22.12345678
b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).
Example semi-annual: 13%/2 =0.065
c. For the "VALUE OF THE
Example: 824.59= 825
1. Charlie Corporation is a chemical company. The company issued an outstanding bond with a P100,000 par value at 15-year maturity date. The coupon rate is 8%, and interest is paid quarterly. The required nominal interest rate on this borrowings has now increased to 16 percent . What is the current market value of the bond?
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