a. Compute the current price of a bond which matures in 40 years and has a required rate of return of 10 percent, a semi-annual coupon rate of 6 percent. b. What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 105% with coupons rate of 10%? Assume the par value of the bond is $1,000.
a. Compute the current price of a bond which matures in 40 years and has a required rate of return of 10 percent, a semi-annual coupon rate of 6 percent. b. What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 105% with coupons rate of 10%? Assume the par value of the bond is $1,000.
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 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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Answer the following questions using a financial calculator and show all working. Do not use excel:
a. Compute the current price of a bond which matures in 40 years and has a required
b. What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 105% with coupons rate of 10%? Assume the par value of the bond is $1,000.
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