Kevin MTQ

Kevin dutton is investor who specializes in buying corporate debt at discounted values and aims to make gains either by selling bonds at a higher value later or by receiving redemption payments. Kevin is currently evaluating the following investments

Last year Kevin bought $1m nominal value of unquoted 5% bonds in company A at a price of $500000. The bonds are to be redeemed at par in 5 years time but company A is showing signs of financial distress . To value the bonds Kevin has estimated that a return of 30% is appropriate here to compensate for the risks of non payment

Company B , a forestry company is looking to raise $5 million through the issue of 6 year deep discounted zero coupon bonds. The issue price has been set up at a 40% discount. Kevin may invest but is looking for a return of 10% per annum to do so

Kevin also owns fixed rate bonds in company C. These bonds are traded on major bond markets . kevin is thinking of selling them now as he believes that interest rates are going to increase shortly resulting in a drop in the bond price

All 3 companies mentioned pay tax at 25%

What is the estimated current market value of Kevin’s investment in the bonds in company A

Sir here as for discount factor we will consider 30% but as 30% is not given in present value table then what we will do in this case?