can someone explain to me Question 9 , especially the numbers in schedule how do...
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can someone explain to me Question 9 , especially the numbers in schedule how do I get them?
Question 9 Zain Telecoms PLC issues a 3-year maturity 10% Coupon Bonds to finance fibre-optic projects for the World Cup 2022 Expo. The yield to maturity in the market is 10% and the par value is $1,000 Required a. Calculate the price of the Zain Telecoms Bond [5 Marks b. Is this a premium, discount or par bond? Why? [3 Marks] Answer a. Bond Price Year 1 2 3 3 Cash Flows $100 $100 $100 $1,000 Discount Factor 0.9091 0.8264 0.7513 0.7513 Present Value $90.91 82.64 75.13 751.30 $999.99 $1,000 [1 (Formulae) + 2 (Working) + 2 (Correct Answer) = 5 Marks)] [Students are expected to round-up the answer to Par Value [Students should avoid short-cuts and perform calculations on a step-by-step basis so as not to lose valuable marks in case their answer is wrong] b. This is a par value bond. This is because the bond price ($1,000) is equal to par value ($1,000). Question 10 Zain Telecoms PLC issues a 3-year maturity 10% Coupon Bonds to finance fibre-optic projects for the World Cup 2022 Expo. Due to an increase in inflation, the yield to maturity has is now 12%. The par value is $1,000. Required a. Calculate the price of the Zain Telecoms Bond [5 Marks) b. Is this a premium, discount or par bond? Why? [3 Marks)
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