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kelvin

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › kelvin

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 30, 2017 at 2:50 pm #419224
    imran5556
    Participant
    • Topics: 39
    • Replies: 29
    • ☆☆

    Forestry company is looking to raise $ 5 m through the issue of 6 year deep discounted zero coupon bond. The issue price has been set at 40% discount .kelvin may invest but is looking for a return of 10 % per annum to do so?

    Calculate the gross redemption yield on the deep discount Bond?

    Sir i dont understand this question discount

    December 1, 2017 at 7:38 am #419331
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54721
    • ☆☆☆☆☆

    This is very unlikely indeed for Paper F9 – where did you find this question?

    However if they are issuing the debt at a discount, then for every $100 nominal they will only charge $60 (a 40% discount).
    They will not pay any interest (this is what zero coupon means), but they will repay the full $100 on redemption.

    December 1, 2017 at 7:53 am #419341
    imran5556
    Participant
    • Topics: 39
    • Replies: 29
    • ☆☆

    Its was in kaplan revision kit sir

    December 1, 2017 at 8:09 am #419352
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54721
    • ☆☆☆☆☆

    I think Kaplan should not have included this question, however I have explained it to you 🙂

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Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘kelvin’ is closed to new replies.

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