Hello Respected Members,
I am finding it difficult to solve a question relating to Perpetual Bond.
I tried looking for the solution but could not find any. I am getting value of the bond but have problem finding YTM.
I would be glad if anyone could provide me a solution for the question.
Q.) A Rs. 100 perpetual bond is currently selling for Rs. 95. The coupon rate of interest is 14.5 % and the discount rate is 16 %. Calculate the value of the Bond. Should it be bought? What is its Yield to Maturity?
Thanks.
CAclubindia
