Calculate the market price of each bond

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Reference no: EM131258136

Jasmine Ltd is considering issuing bonds to raise funds for a new project. The following three options are being considered.

Bond Coupon

Rate

Coupon/Compounding

Frequency Yield Term in

years Face Value

A 0% half-yearly 7.5% 5 $1,000

B 6.5% half-yearly 7.5% 10 $1,000

C 8.4% yearly 7.5% 8 $1,000

a) Calculate the market price of each bond.

b) Classify each bond as either selling at a premium, par or discount.

c) Assume Jasmine has decided to issue only B Bonds. If Jasmine Ltd needs to raise $465,260 how many bonds would need to be issued?

Reference no: EM131258136

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