A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.4648%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the bond's YTM? %

A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.4648%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the bond's YTM? %

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter14: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6DTM

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Question

A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.4648%.

What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent.
$

What is the bond's YTM?
%

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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