Question

Fast and Loose Company has outstanding an 8 percent, four-year, P1,500,000-par-value bond on which interest is paid annually.

If the market required rate of return is 15 percent, what is the market value of the bond?
What would be its market value if the market required return dropped to 12 percent? To 8 percent?

Answer 1

Answer:

A.400cm B. 500cm C. 600cm