Sirimal expects to buy a bond with a par value of Rs.1,000/= which will be matured in 06 years. Bond earns an annual coupon rate of 12% is where as in market similar type of a bond pays an interest rate of 10%.Compute the price of the bond today and determine whether this bond is a premium bond or discounted bond.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sirimal expects to buy a bond with a par value of Rs.1,000/= which will be matured in 06
years. Bond earns an annual coupon rate of l12% is where as in market similar type of a
bond pays an interest rate of 10%.Compute the price of the bond today and determine
whether this bond is a premium bond or discounted bond.
Transcribed Image Text:Sirimal expects to buy a bond with a par value of Rs.1,000/= which will be matured in 06 years. Bond earns an annual coupon rate of l12% is where as in market similar type of a bond pays an interest rate of 10%.Compute the price of the bond today and determine whether this bond is a premium bond or discounted bond.
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