Lyons Bond Accounting

March 11, 2019 | Author: Nakul Kothari | Category: Bonds (Finance), Interest, Discounting, Net Present Value, Interest Rates
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CORPORATE FINANCE CASE STUDY LYONS DOCUMENT STORAGE CORPORATION: BOND ACCOUNTING

Section D Monika Datal (02!"#2$  Ni%&a Sin'& Sin'& (02#!"#2$ (02#!"#2$  Ntal Gn)*al Gn)*al (02#+"#2$ (02#+"#2$  Ne&a Patil (02+"# (02+"#2$ 2$ 1

,-!$ a$ Di%cont Bon.: A /on. i% con%i.ee. a .i%cont /on. 1&en it &a% a lo1e intee%t ate t&an t&e cent aket ate3 an. con%e4entl* i% %ol. at a lo1e 5ice- In t&e L*on% Bon. Accontin' e6a5le3 t&e /on. i% i%%e. at an intee%t ate o7 89 (1&ic& i% lo1e t&an t&e aket intee%t ate o7 9$ an. &ence it i% a .i%cont /on. Pei Bon.: A /on. 1ill ta.e at a 5ei 1&en 5ei 1&en it o77e% a co5on ate t&at i% &i'&e  t&an 5e;ailin' intee%t ate%- T&i% i% /eca%e in;e%to% 1ant a &i'&e *iel.3 an. 1ill 5a* oe 7o it /$ Co5on ate: 89 5ai. %eiannall* Maket Yiel.: 9 (i-e- ¿ ¿  FV  1− ¿ + ¿ 1

C   R

>

(

 ¿

400000 0.045

[

) 1−(

1 1

+ 0.045

40

](+

) +

  10000000 1 0.045

40

)

> 0+20-+8 > -0+ illion c$ In o.e to calclate t&e ot%tan.in' .e/t at !%t Dec03 e 1ill 7i%t calclate t&e ;ale o7 .e/t e5ai. /* !%t Dec0 at Peio. 0 =N/e o7 %eiannal 5eio.%: !# @ale o7 aont 5ai. till !%t Dec03 calclate. at 5eio. 0 1

+ ¿ ¿ > 1− ¿ 1 r

C   R

¿

2

>

(

400000 0.045

[

) 1−(

15

1 1

+ 0.045

)

]

> 0+20-+8   ( 4784102.49 )∗( ¿¿ 15 ) >  2#8#8-##2 = Beca%e in con%i.ein' lon' te .e/t 1e a%%e t&at !#t& in%tallent i% 5ai. e;en i7 onl* !< in%tallent% &a;e /een 5ai.3 1&ile !#t& in%tallent 1ill /e 5at o7 cent lia/ilitie% 7o  FY 200"0+ Siilal* to calclate t&e ot%tan.in' .e/t at !%t Dec0+3 e 1ill 7i%t calclate t&e ;ale o7 .e/t e5ai. /* !%t Dec0+ at Peio. 0 ==N/e o7 %eiannal 5eio.%: !+ @ale o7 aont 5ai. till !%t Dec0+3 calclate. at 5eio. 0 1

+ ¿ ¿ > 1− ¿ 1 r

C   R

>

(

¿

400000 0.045

[

) 1−(

17

1 1

+ 0.045

)

]

>  0+20-+8   22!!-2# == Beca%e in con%i.ein' lon' te .e/t 1e a%%e t&at !+t& in%tallent i% 5ai. e;en i7 onl* ! in%tallent% &a;e /een 5ai.3 1&ile !+t& in%tallent 1ill /e 5at o7 cent lia/ilitie% 7o  FY 200+"08$ .$ Maket ate 5e ann> 9 Face ;ale> !030003000 Co5on ate 5e ann (5ai. %ei annall*$ > 89 Co5on aont > !!3#
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