Problemscq holdings limited issued a 16-year bond on 13, Ask an Expert

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Problem:

SCQ Holdings Limited issued a 16-year bond on 13 September 2011 paying 14.2% per annum in semi-annual coupons. Today is 14 September 2016, and Steph White is considering buying $163 000 face value of the SCQ bond. Note the quantity of bond is expressed in face value, and $163 000 is not necessarily the amount paid for it.

Required:

Question 1: If Steph makes that purchase, list the date and amount of next three coupon payments she should receive.

Question 2: If Steph can choose between investing in this bond or in other securities of similar risk that are paying 7.3% per annum (effective), how much is the maximum she should be willing to pay to purchase the bond?3

Note: Please provide equation and explain comprehensively and give step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148947

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