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This is question 4 b of F9, December 2011, what is the relationship that exist on the current traded amount of Bonds $112·50m, the $90m which was being used to buy back bonds and Nominal value which the examiner found to be $80m. I can not figure out how the examiner found $80m nominal……, beside i can not also find his report for 2011 f9 paper…., Help please and thank u in advance.
The bonds have a market value of 112.50 for every 100 nominal.
They are paying 90 million to buy back bonds and they will buy them at the market value of 112.50 (for every 100 nominal).
So…….90M will buy them 90M/112.50 = 800000 bonds. Since each bond has a nominal value of 100, the total nominal value is 800000 x 100 = 80M.
The examiners report is not yet online on the ACCA website.
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