tsbury Ltc. has issued a bond two years ago with a par value of Rp100 million. The maturity of the bond is 15 years, with a coupon rate of 10%. The bond can be called (callable bond) in year 10 with a premium price of 25% above par value. The risk-free rate is 5% and the investor risk premium is 3%. Tax rate is 25%. Based on the information, calculate the intrinsic value of the bond based on: (a) call

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Q: what is the current market value of Elite's bond?

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A:

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Q: The corporation has issued a bond which has a P1,000 par value and a 15% annual coupon interest…

A: Solution Coupon Interest (C) = 1000*15% = 150 n = 10 periods F = 1000 P = 1250