A company has loan notes in issue paying interest at the rate of 6% per year.
Posted: Mon Mar 07, 2022 8:29 am
Interest has just been paid on the loan notes, which are due for repayment in exactly one years time.
The loan notes will be redeemed at $109 per $100 nominal value. A yield of 9% per year is required by investors from the loan notes.
What is the predicted current market value of the loan notes? (To the nearest $ and ignoring taxation)
A. $100
B. $102
C. $106
D. $108
The loan notes will be redeemed at $109 per $100 nominal value. A yield of 9% per year is required by investors from the loan notes.
What is the predicted current market value of the loan notes? (To the nearest $ and ignoring taxation)
A. $100
B. $102
C. $106
D. $108