Multiple Choice Questions on Company issued 10 1000 Bonds issued at 990 redeemed after 5 years at 1050 calculate it rsquo s prese........... for SEBI Grade A ( Officer) Exam Preparation

Back to Main Page

Multiple Choice Questions

Company issued 10 1000 Bonds issued at 990 redeemed after 5 years at 1050 calculate it rsquo s prese...........

Finance (Phase -I & II) Others
    Download Solution PDF

    Company issued 10%, 1000/- Bonds issued at 990/- redeemed after 5 years at 1050/-, calculate it’s present value if discounting rate applicable is 15%.

    880.25

    Incorrect Answer

     840.85

    Incorrect Answer

     850.50

    Incorrect Answer

     856.85

    Correct Answer

     820.85

    Incorrect Answer
    छोटे Courses बड़े Results
    Master Others
    Prepare through Micro-courses
    Try Now
    Explanation:
    PV=  100       +    100    +     100    +      100    +  100 + 1050
            (1+r)1          (1+r)2      (1+r)3        (1+r)4            (1+r)5
     
     100          100            100         100              1150
     -----   +    --------   +   -------  +   -------    +   ------
    (1.15)1     (1.15)2       (1.15)3    (1.15)4     (1.15)5
     
    = 86.90  + 75.60  + 57.10 + 571.55  
     
     = 856.85
     
     So, it is not worth for an investor to invest in such bonds as these are issued at price more than present value.

    By: VISHAL GOYAL
    ProfileResources

    Let's Discuss

    Master
    Others
    With abhipedia
    Micro Courses
    Try Now
    What our students have to say
    Review on us
    Download Abhipedia Android App

    Access to prime resources

    Downlod from playstore
    download android app download android app for free