To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00? Ans. P 959.45

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
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To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00?
Ans. P 959.45
You purchased a P 500 bond for P 5,100.00. The bond pays 200 per year. It is redeemable for P 5,050 after 10 years. What is the net rate of interest on your
investment? Ans. 3.486%
Transcribed Image Text:To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00? Ans. P 959.45 You purchased a P 500 bond for P 5,100.00. The bond pays 200 per year. It is redeemable for P 5,050 after 10 years. What is the net rate of interest on your investment? Ans. 3.486%
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