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Find bond yield to maturity should encik aidil

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Reference no: EM132593394

Encik Aidil is considering purchasing bonds of the Nur Kasih Entertainment Holding which currently sell at market price of RM 1,050. The bond has a par value of RM1,000 with 10 percent coupon rate and will mature in 10 years. However the bond maybe called in 5 years at a call price of RM1,200.

Question a. Compute the bond's yield to maturity (YTM). Based on bond's yield to maturity should Encik Aidil buy the Bond's if the required rate of return is 8 percent? Justify your answer.

Question b. Compute the bond's value if the coupon paid semiannually and required rate of return is 12 percent. Based on the price of the bond please explain to Encik Aidil why you want him to buy or not the bond.

Reference no: EM132593394

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