Forums › ACCA Forums › ACCA FM Financial Management Forums › F9 question
- This topic has 4 replies, 3 voices, and was last updated 7 years ago by John Moffat.
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- March 8, 2017 at 1:56 pm #376589
A bond has a coupon rate of 6% per annum and will repay its face value of $100 on its maturity in four years time. Investors expect a return of 4% per annum. The annual interest has just been paid for the current year.
Calculate the market value of the bond at today’s date
March 8, 2017 at 4:14 pm #376617Current market value is present value of future receipts
So,
1. Present value of repayment of $100 discounted @0.855 = 85.5
2. Present value of interest $6 p.a discounted @3.630 = 21.78Total PV = 107.28
The current market value of the bond is $107.28
March 8, 2017 at 6:36 pm #376754accastudent001: What you have written is perfectly correct 🙂
However I am writing because I must ask you to change your picture. The ACCA get very angry when anyone uses their logo 🙁
March 9, 2017 at 3:46 am #376912Thanks for the comment on answer sir.
Regarding profile picture, I have changed it right away. Thanks for pointing it out.
March 9, 2017 at 8:19 am #376970Thanks a lot 🙂
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