Issued bonds with face value

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Reference no: EM131081549

African supplies Ltd has issued bonds with a face value of 100 and which pay a coupon rate of 7% per year. The company is required to make coupon payments semi -annually on 30 June and 31 December of each year. The current date is 1 July 20X5. The yields on similar bonds are currently 8% per year. The maturity date is in 5 years’ time. What is the value of each bond? What is the annual effective rate?

Reference no: EM131081549

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