13.) A bond has an annual 8 percent coupon rate, a maturity of 10 years, a face value ofST000 and makes semi-annual pavments If the price is $934.96, what is the annualnominal yield to maturity?

Yield to maturity (YTM) is the total rate of return received by a bond after it has made all…

Answered: A bond has an annual 8 percent coupon…

A bond has an annual 8 percent coupon rate, a maturity of 10 years, a face value of STO00 and makes semi-annual pavments If the price is $934.96, what is the annual nominal yield to maturity?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 3P: Current Yield for Annual Payments Heath Food Corporations bonds have 7 years remaining to maturity....

See similar textbooks

Related questions

Q: A bond currently sells for P850. It has an 8-year maturity, an annual coupon of P80, and a par value…

A: A bond is an instrument that is considered as a unit of debt that is taken by a corporation from the…

Q: A bond has a $1,000 par value, 12 years to maturity,and an 8% annual coupon and sells for $980.a.…

A: a) The computation of yield to maturity as follows: Hence, the YTM is 8.27%.

Q: Calculate the current yield of a bond with $1,000 face value, 7.50% coupon rate, quarterly coupon…

A: A bond is an instrument that represents the loan that is made by the investor to the company and…

Q: A semi-annual coupon bond has a face value of $1,000 and a coupon rate of 5.6%. Time to maturity is…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: A five-year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond…

A: The current yield is the annual interest earned divided by the current price of the bond.

Q: What is the semi-annual coupan bond's norminal yield to maturity (YTM), if the years to maturity is…

A: Bond is debt-instrument that is used by entities t raise debt funds from public-at-large. Bonds pay…

Q: what is its yield-to-maturity?

A: Bond valuation is a method of finding the fair value of the bond. Fair value means the present…

Q: A zero-coupon bond with 15 years to maturity and a face value of $1000 is priced at $239.39. What…

A: We have; Years to maturity (N) as 15 years Face Value(FV ) as $1000 Price of Bond (Present Value )…

Q: A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9%…

A: Given Information:Par value of bond = $1000 Annual coupon rate of bond = 9% (paid semi annually)…

Q: The yield to maturity of a $1,000 bond with a 6.8% coupon rate, semiannual coupons, and two years to…

A: Bond valuation is an important technique of fundamental analysis of security management. The bond…

Q: A 10 year maturity bond with a coupon rate of 5.5% and face value of $1,000 makes semi- annual…

A: In this question we require to calculate the yield to maturity of a bond if its current selling…

Q: The KLM bond has a 8% coupon rate (with interest paid semi-annually), a maturity value of $1,000,…

A: Bonds are debts instruments that are issued by entities to raise funds and meet their capital…

Q: Suppose a seven-year, $1000 bond has a price of $980 and a yield to maturity of 8%. What is the…

A: A Bond's coupon rate is the rate of interest that is paid by the issuer of the bond on the face…

Q: What is the semi-annual coupon bond's nominal yield to maturity, if the years to maturity is…

A: Given: Years to maturity = 15 years Coupon rate = 10% Par value = $1000

Q: What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is…

A: Par Value = 1000 Price of Bond = 105% × 1000 = 1050 Coupon = Coupon Rate / 2 × Par Value Coupon =…

Q: A bond currently sells for $850. It has an 8-year maturity, an annualcoupon of $80, and a par value…

Q: What is the semi-annual coupon bond's nominal yield to maturity (YTM), if the years to maturity is…

A: YTM stands for Yield to maturity which is defined as the aggregate return anticipated on bond when…

Q: A bond has nine years to maturity, a $2,000 face value, and a 5.5% coupon rate with annual…

A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…

Q: What is the duration of a two-year bond that pays an annual coupon of 9 percent and has a current…

A: Introduction Bond Duration: Bond period is a metric for determining how much bond prices can…

Q: A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par value. Which…

A: YTM of bond = 10% The bond is trading at par, which reflects that The price of the bond is equal…

Q: Find the selling price for a zero coupon bond with 8 years to maturity and a $100,000 maturity value…

A: A zero-Coupon Bond is a debt security that is traded at a deep discount instead of paying interest.

Q: One bond has a coupon rate of 6 %, another a coupon rate of 8.0%. Both bonds pay interest annually,…

A: Rate of Return = (Coupon Rate+ Ending price - Beginning Price) /Beginning Price

Q: A bond has an annual coupon rate of 4.1%, and has 4 years until maturity. If the bonding trading at…

A: Let face value of Bond be $1000 Annual coupon = Face value of bond * Coupon rate = $1000 * 4.1% =…

Q: What is the semi annual coupon bonds nominal yield to maturity (ytm),if the years to maturity is 15…

A: in this problem we have to consider discount rate at which present value of par value and present…

Q: A 10-year bond has a coupon rate of 11%, a par value of $1000. If the bond’s YTM is 7%, what is the…

A: Assume semi annual coupon bond (Such an assumption is customary to bonds in US market). This means…

Q: A bond for Firebird, Inc. has a coupon rate of 7%. The yield to maturity is 6.8%. The bond has a…

A: GIVEN, COUPON RATE = 7% R=6.8% N=30 YEARS PAR = 1000

Q: uppose the bond matures in 12 years

A: Price of a bond = present value annuity of interest and Present value of face value of bond. 0.926…

Q: If a $1,000 bond with a 4 percent coupon (paid annually) and a maturity date of ten years is selling…

A: A financial instrument that doesn’t affect the ownership of the common shareholders or management of…

Q: What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the…

A: A bond is a financial security that is sold by large business entities to raise borrowing funds.…

Q: A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9%…

A: Solution:- Bond price means the price at which the bond is currently trading in the market. Price of…

Q: A zero-coupon bond that matures in 15 years is currently selling for $209 per $1,000 par value. What…

A: In the given question we require to compute the yield on zero coupon bond using below details : Time…

Q: A bond with a coupon rate of 6.5% (assume it is paid once annually), maturing in 10 years at a value…

A: The current yield is providing the current profitability of the bond value. The value of the bond is…

Q: A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9%…

A: Solution:- Bond price means the price at which the bond is currently trading in the market. Price of…

Q: What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is…

A: Yield to maturity is the rate at which the present value of cash flows from the bond, equals the…

Q: A bond has a $1,000 par value, a 13% annual coupon, and matures in 5 years. What is the price of…

A: Computations as follows: Hence, the price of the bond is $1036.05.

Q: The yield to maturity of a $1,000 bond with a 7.3% coupon rate, semiannual coupons, and two years to…

A: Solution:- Price of bond means the price at which the bond is currently trading in the market. So,…

Q: The yield to maturity of a $1,000 bond with a 7.4% coupon rate, semiannual coupons, and two years to…

A: Price of a bond = sum of present values of all future cash flows associated with the bond. The cash…

Q: A bond has a $1,000 par value, a 12% semiannual coupon, and matures in 4 years. What is the price…

A: Computations as follows: Hence, the bond price is $1000.00.

Q: A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for $985.…

A: Yield to maturity (YTM) is the total return expected on the bond if the bold is held till maturity.…

Q: Today, a bond has a coupon rate of 12.1%, par value of $1,000, YTM of 8.20%, and semi-annual coupons…

A: The rate of return that represents the current profitability of the bond is known as the current…

Q: A bond with 15 years to maturity, a face value of $1000, pays a coupon rate of 14% APR compounded…

A: Solution:- Yield-to-maturity means the rate of return earned by bond holder, if the bond is hold…

Q: What is the price of a 5-year bond with a nominal value of $100, a yield to maturity of 7% (with…

A: Nominal value (V) = $100 Yield to maturity (i) = 0.07 Coupon rate = 0.10 Annual coupon amount (C) =…

Q: A bond with 15 years to maturity, a face value of $1000, pays a coupon rate of 14% APR compounded…

A: Time to maturity is 15 years Face Value is $1000 Coupon rate is 14% Compounded Semi-annually Price…

Q: A 10 year bond with 5% annual coupon and $1,000 par value sells for $1,200. What is the…

A: Face value = $1000 Duration (n) = 10 years Coupon = 5% of $1000 = $50 Bond price = $1200 Let r =…

Q: A bond maturing in fifteen years has a a current price of $825.65, yield to maturity of 9.25%, a…

A: The coupon rate is the annual return an investor seek to receive while holding a bond. Coupon rate…

Q: A bond a has a par value of P100, a coupon rate of 10.75% and matures in 5 years. If interest is…

A: Bonds Bonds refer to the fixed income instrument that is issued by the corporations or government in…

Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

13.) A bond has an annual 8 percent coupon rate, a maturity of 10 years, a face value of
ST000 and makes semi-annual pavments If the price is $934.96, what is the annual
nominal yield to maturity?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?
Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?
What would be the value of the bond described in Part d if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing investors to require a 13% return? Would we now have a discount or a premium bond? What would happen to the bond’s value if inflation fell and rd declined to 7%? Would we now have a premium or a discount bond? What would happen to the value of the 10-year bond over time if the required rate of return remained at 13%? If it remained at 7%? (Hint: With a financial calculator, enter PMT, I/YR, FV, and N, and then change N to see what happens to the PV as the bond approaches maturity.)
Current Yield for Annual Payments Heath Food Corporations bonds have 7 years remaining to maturity. The bonds have a face value of 1,000 and a yield to maturity of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield?