XYZ pty Ltd is considering investing in one of two outstanding bonds. The bonds offer 11% coupon interest rates and pay annual interest. Bond A has exactly 5 years to maturity and bond B has 15 years to maturity. You are appointed to evaluate the bond. Calculate the value of bond A and B if the required return (YTM) is 9%

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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.