a $1000 par value bond with 30 years to maturity has a 5.8% coupon rate with semi-annual interest payments. if the bond is currently priced at $1,135.84, what is its yield to maturity? 4.9282% 5.0735% 2.2707% 4.9240% 4.5413%

a $1000 par value bond with 30 years to maturity has a 5.8% coupon rate with semi-annual interest payments. if the bond is currently priced at $1,135.84, what is its yield to maturity? 4.9282% 5.0735% 2.2707% 4.9240% 4.5413%

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 13P: Yield to Maturity and Current Yield You just purchased a bond that matures in 5 years. The bond has...

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Question

a $1000 par value bond with 30 years to maturity has a 5.8% coupon rate with semi-annual interest payments. if the bond is currently priced at $1,135.84, what is its yield to maturity?

4.9282%

5.0735%

2.2707%

4.9240%

4.5413%

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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