Bond Valuation - Printable Version +- Accountancy Forum (https://www.accountancy.com.pk/forum) +-- Forum: The Profession (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=4) +--- Forum: Accounting and Audit (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=7) +--- Thread: Bond Valuation (/showthread.php?tid=7566) |
Bond Valuation - hinanifaf - 03-10-2010 Good Day Dear Members, Q as follows A investing in the bonds of P Industries.Bonds were issued 5yrs ago @ their N$1000 PV,and have 25yrs remaining until they mature.Their coupon interest rate 8%,are convertible into 50 shares of common stock,can be called any time at N$1080.Inflation,currently @ 5% annually,is likely to increase to a 6% annual rate. What is the bonds value at a required rate of return of 6%? And is it selling at a discount,at a premium or at par value? Many thanks |