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ACCA F9 lectures ACCA F9 notes
December 4, 2013 at 1:48 pm
I need a little clarification. The company repays $5 interest per year but what does the 6.25 % interest means(5/80*100)? Do they give the debenture holder this amount as the large discount?
John Moffat says
December 4, 2013 at 1:53 pm
The company is paying 5% on the nominal value.
However if investors are prepared to pay $80 on the stock exchange in order to get $5 a year interest, it must mean that they are currently requiring a return on 5/80 = 6.25% (because it is investors who fix the market value – if they wanted a higher or lower return they would fix a different market value).
October 2, 2013 at 5:36 pm
A VERY GOOD LECTURE BUT THE LECTURER’ VOICE CANNOT BE HEARD QUITE WELL. I WISHED HE CAME CLOSER TO THE MIC
October 2, 2013 at 6:01 pm
It was recorded during a live lecture, and I walk around which is what has caused the problem
I will record it again when I have the time.
November 22, 2013 at 1:12 pm
Use earphones/headsets. Helps very well!
May 18, 2015 at 12:07 pm
john i would be very grateful if you could please repeat what you said in the very last minute about the risk involved in zero coupon bonds
May 18, 2015 at 4:53 pm
Because they don’t pay interest, but instead pay a large ‘bonus’ on repayment, the huge risk is that the business might not be able to afford the repayment and therefore go bankrupt!
Businesses issue zero-coupon bonds to save money (no interest) while they are growing. If they do manage to grow then all is fine, but if they don’t then they may face the problem above
Hope that clears it up for you
June 5, 2012 at 12:09 am
The sound of this lecture is very poor but otherwise the content is rich
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