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Compute the price of the bond

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Reference no: EM133062009

Zara Bond is a 3-year redeemable bond with a coupon rate of 18 percent which is paid semi-annually. The market demands a return of 15% to invest in this bond. Zara Bond is sold at a redemption value of GHS100, at par with the face value.

Required:

a. Compute the price of the bond.

b. Compute the yield to maturity (YTD or IRR) on the bond.

Reference no: EM133062009

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