i) What would the value of the bonds on December 31, 2021, if the interest rates had risen to 18%? based on the price of the bon, how would you classify the bond" ii)What woul dbe the value on June 30, 2027, if interest rates had fallen to 10%? Based on the price of the bond, how would you classify the bond?
Solar 123 Limited (SL) is operating in the Boom energy sector. The company recognized that to stay competitive it must Implement projects which would reduce the cost of the products. SL's board of directors approved the recommendation Finance the project by issuing new debt. On January 1, 2019, SL issued new bonds which will mature on December 31, 2038. The bonds have a par value of $1,000 and a coupon rate of 13%. Coupon payments are made semi-annually.
i) What would the value of the bonds on December 31, 2021, if the interest rates had risen to 18%? based on the price of the bon, how would you classify the bond"
ii)What woul dbe the value on June 30, 2027, if interest rates had fallen to 10%? Based on the price of the bond, how would you classify the bond?
iii) If the bonds had a value of $1,080 on June 13, 2027, what would be their yield to maturity on that date?
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