1) Sabwei Corporation issued 20 years, noncallable, 7.5% annual
coupon bonds at their par value of RM1,000 one year ago. Today, the
market interest rate on these bonds is 5.5%.
What is the current price of the bonds,
given that they now have 19 years to maturity?
The bond price is RM
What is the price of the bond in three year from now,
assuming the market interest rate remains the
same?
The bond price in three years’ time is RM
(Also round your answer to 2 decimal points.)
2) KayEffS Corporation’s bonds have a 15-year maturity, a 7.25 %
semiannual coupon, and a par value of RM1.000. The going
interest rate is 6.20%, based on semiannual
compounding
What is the bond’s price?
The bond’s price is RM
What is the bond’s price if the semiannual coupon rate
is 5.5%?
The bond’s price is RM
Bonds price is usually sold at a [
] when the coupon rate is higher
than the interest rate.
( Also round your answer to 2 decimal points)
