XYX is a top company of India. This company has a sound financial track record. In last 10 years every year the company has declared dividend to its shareholder. This time the company issued a bond with face value of Rs.10,000 has 10 years until maturity, carries a coupon rate of 8% and redemption value of Rs.17500. Interest is compounded annually. Calculate the yield to maturity for the bond if was purchased for Rs.15000. Do you think it is worthful to invest in this bond?

XYX is a top company of India. This company has a sound financial track record. In last 10 years every year the company has declared dividend to its shareholder. This time the company issued a bond with face value of Rs.10,000 has 10 years until maturity, carries a coupon rate of 8% and redemption value of Rs.17500. Interest is compounded annually. Calculate the yield to maturity for the bond if was purchased for Rs.15000. Do you think it is worthful to invest in this bond?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 15P

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