MAX Co., issued a 20-year bond with a face value ofP100,000 with a coupon rate of 12%. Last year, the bond isquoted 95 ½ and it is expected that the bond will be quoted a98 4. The total return this year would be closest to:a. 15.97%b. 15.40%c. 3.40%d. 10.47%e. 12.10%f. 8.62%

Par value of bond = P 100,000 Coupon rate = 12% Coupon amount = 100,000*0.12 = P 12,000 Current…

Answered: MAX Co., issued a 20-year bond with a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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MAX Co., issued a 20-year bond with a face value of P100,000 with a coupon rate of 12%. Last year, the bond is quoted 95 ½ and it is expected that the bond will be quoted a 98 4. The total return this year would be closest to: a. 15.97% b. 15.40% c. 3.40% d. 10.47% e. 12.10% f. 8.62%