A RM2,000 bond with 8% convertible semi-annually coupon matures at par on 15th October 2025. The bond was purchased on 28th June 2009 which yield at 9% convertible semi-annually.   Determine the purchase price of the bond?   Assume simple interest between bond coupon dates and note that: Date Day of the year 15 April 105 28 June 179 15 October 288

Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
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Chapter11: Notes, Bonds, And Leases
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a) A RM2,000 bond with 8% convertible semi-annually coupon matures at par on 15th October 2025. The bond was purchased on 28th June 2009 which yield at 9% convertible semi-annually.

 

Determine the purchase price of the bond?

 

Assume simple interest between bond coupon dates and note that:

Date Day of the year
15 April 105
28 June 179
15 October 288

 

b) A RM2,000 par value 15-year bond with coupons at 10% payable semi-annually will be redeemed at RM2,500. The bond is bought to yield 12% convertible semi-annually.

 

Find the price of this bond by using:

 

i) Premium/discount formula

ii) Makeham formula

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