A R1,000 par value bond makes annual coupon payment of R55. If it offers a yield to maturity of 5.5 percent, what is the price of the bond?  A. R 750  B. R 1000  C. R1075  D. R 925

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.