Determine new prices of the bond after three years

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Problem 1: Zydus Ltd. has issued 8% debentures of Rs. 50000000, each of Rs. 1000. Term to maturity is 10 years. HCL has also issued 8% debenture of Rs. 10 crore, each of Rs.1000. Term to maturity for these bonds is 20 years. After 2 years, yield to maturity decreases by 1%. Determine new prices of the bond after 3 years and also find out which bond price will be largely impacted and why? You may assume redeemable value equal to face value.

Reference no: EM132887335

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