Concept Introduction:
A bond is the debt security or an instrument where the issuer of bond has liability to bondholders to pay off the principal debt at the maturity date along with the interest rate or coupon rate agreed.
Bonds are issued at par value, premium or discount which are briefly explained as below:
Issue at Par value: The bond is issued at face value of the bond that indicates the market price and contract price of the bond are equal.
Issue at premium: The bonds, if issued at a price higher than its face value it indicates that bonds are issued at premium.
Issue at discount: The bonds, if issued at a price lower than its face value it indicates that bonds are issued at discount.
Requirement-1a:
To determine:
The par value of the bond issuance at the rate of 4.625% and the book value of the bond.
Requirement-1b:
To identify:
The issuance of bond sold is made at premium or discount from the data given in the reports of Vodafone Group Plc and to explain the identification for the solution.
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