4. A bond with a par value of P 1,000 and with a bond rate of 10% payable annually is sold now for P 1,080. If the yield is to be 12%, how much should be the redemption price at the end of 8 years? Ans. 1,444.07

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.