Assume that a $1,000,000 per value, semiannual coupon US Treasury note with two years to maturity has a coupon rate of 4%. The yield to ma (YTM) of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: O $776,642.92 O $913,697,55 O $1,096,437,06 O $575,629.46 Based on your calculations and understanding of semiannual coupon bonds, complete the following statement: The T-note described in this problem is selling at a

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter9: The Cost Of Capital
Section: Chapter Questions
Problem 16P
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Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the
amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly.
Assume that a $1,000,000 par value, semiannual coupon US Treasury note with two years to maturity has a coupon rate of 4%. The yield to maturity.
(YTM) of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
O $776,642.92
O $913,697.55
O$1,096,437,06
Based on your calculations and understanding of semiannual coupon bonds, complete the following statement.
The T-pote described in this problem is selling at a
Transcribed Image Text:Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon US Treasury note with two years to maturity has a coupon rate of 4%. The yield to maturity. (YTM) of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: O $776,642.92 O $913,697.55 O$1,096,437,06 Based on your calculations and understanding of semiannual coupon bonds, complete the following statement. The T-pote described in this problem is selling at a
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