Notting Hill Berhad issued 25-year bonds three years ago. The bonds are currently selling for 97 percent of par. The face value of the bond is RM1,000 per unit. However, upon maturity, the bondholders can redeem the bonds at a premium of 10% to the par value. The yield-to-maturity of the bond is 9 percent per annum. Assuming the coupon payment is paid quarterly, calculate the annual coupon rate of the bonds.
Notting Hill Berhad issued 25-year bonds three years ago. The bonds are currently selling for 97 percent of par. The face value of the bond is RM1,000 per unit. However, upon maturity, the bondholders can redeem the bonds at a premium of 10% to the par value. The yield-to-maturity of the bond is 9 percent per annum. Assuming the coupon payment is paid quarterly, calculate the annual coupon rate of the bonds.
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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Notting Hill Berhad issued 25-year bonds three years ago. The bonds are currently selling for 97 percent of par. The face value of the bond is RM1,000 per unit. However, upon maturity, the bondholders can redeem the bonds at a premium of 10% to the par value. The yield-to-maturity of the bond is 9 percent per annum. Assuming the coupon payment is paid quarterly, calculate the annual coupon rate of the bonds.
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