1. Suppose that today, the current yield for a corporate bond is 4.5%. If the market price goes up by 12% tomorrow, compute the current yield after the increase.
2. The amount borrowed is $300 million and the term of the debt credit facility is six years from today
The facility requires minimum loan repayments of $9 million in each financial year except for the first year.
The nominal rate for this form of debt is 5%. This intestest rate is compounded monthly and is fixed from the date the facility was initiated.
Assume that a debt repayment of $10 million is payed on 31 August 2018 and $9million on April 30 2019. Following on monthly repayments of $9 million at the end of each month from May 31 2019 to June 30 2021.
Given this information determine the outstanding value of the debt credit facility on the maturity date.