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What is the value of the bond

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Question - ABC Plc has issued 5 years Debentures with a face value of Rs.1000. The coupon rate of the debenture is 12% and the interest is paid annually. At maturity the bond is redeemed paying Rs.1100.

1. If the investors required rate of return is 12.5% and the remaining time to maturity is 3 years, what is the value of the bond?

2. Briefly explain the relationship between the coupon rate, investors' required rate and the price of a Bond.

Reference no: EM132824655

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