B. Orient Express Bhd has successfully secured a new project in Nusa Jaya. Mr. Johnny, a Finance Director, proposes to i
Posted: Tue Nov 16, 2021 8:46 am
company received a rating “AA” from Malaysian Rating Corporation Bhd on the bond issued. Required: i) Determine the yield to maturity of the new bond assuming the interest is payable on a yearly basis. (4 marks)
B. Orient Express Bhd has successfully secured a new project in Nusa Jaya. Mr. Johnny, a Finance Director, proposes to issue 100,000 units of a new bond at net issue price less discounted value to finance the project. The discount rate is estimated to be 5% of the par value. The new bond, which has a par value of RM1,000, and a ten-year maturity period, will pay a 10% annual coupon. Recently, the