What is the expected rate of return

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Question - ABC Phones is interested in investing some of its petty cash in eleven year DEF Wireless bonds which has P1,000 face value, annual coupon rate of 8% and yield to maturity of 12%.

1. What is the value of the bond upon its issuance?

2. What is the value of the bondon the 11th year?

3. If YTM increases to 14%, but the ABC Phones does not intend to return the bonds to the market, what is the expected rate of return?

Reference no: EM133138006

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