AA Builder Bhd has issued an RM1,000,000 nominal value of zero coupon bond with a life of 20 years to finance its business project. If the bond is expected to yield 9%, what is the intrinsic value of this bond?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. RM178,430.89
B. RM194,489.67
C. RM277,058.48
D. RM555,555.56
Answer:A
AA Builder Bhd has issued an RM1,000,000 nominal value of zero coupon bond with a life of 20 years to finance its business project. If the bond is expected to yield 9%, what is the intrinsic value of this bond?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. RM178,430.89 B. RM194,489.67 C. RM277,058.48 D. RM555,555.56