Multiple choice

Directions: Choose the correct option for the given question.

A company has issued a 20-year bond at Rs. 1 par value with a coupon rate of 10 per cent. The required rate of return on similar bonds is 12 per cent. What is the current value of the bond?

  1. Rs. 905.33

  2. Rs. 850.45

  3. Rs. 833.33

  4. Rs. 820.20
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