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1, How much would you pay to receive a 15-year bond with a par value of...

1, How much would you pay to receive a 15-year bond with a par value of $1,000 and a 12 percent coupon rate?

2, How would you go about valuing XYZ Company?

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Answer #1

1) As per above data mentioned, yield rate is not given in the question so i am considering yeild rate at 10%p.a

YEAR PARTICULARS CASHFLOW D.F@10% D.C.F

1-15 Interest @12% $120 7.6061 $912.73

15 Redemption vlue $1000 0.2394 $239.4

Value of bond = $1152.13

The above answer has came on the basis of taking into consideration f yield rate @10p.a

2) valuation of company is done on the basis of net worth of the company i-e

Value = Total assets - External liabilities of the company ..

All the data will be as per present value of the company.

This answer is based on the data provided.

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