Compute the value of the bond at the end

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Question - A company invested in a 5 year bond issue of another company in 2002 carrying coupon rate of 10% per annum, the interest payable at half- yearly rests and the principal repayable after 5 years in 2006 end. The current market yield has fallen to 9% during 2003. The Investor Company wanted to take advantage of the fall in market yield by selling the bond to any willing buyer. Compute the value of the bond at the end of 2003. Assume par value of each bond Rs.1,000.

Reference no: EM132857337

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