Answered: Assume the bonds par is $1000. A 13 yr…

Assume the bonds par is $1000. A 13 yr bond is selling at $1,040 and its coupn is paid semi annually. If the YTM is 9%, what is the coupon rate? Please show the steps.

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 4MC

See similar textbooks

Related questions

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

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

Q: Assuming the bonds par is $1000. A 9 yr bond is selling at $980 and its coupon rate is 5% paid…

A: Yield to maturity Years (9*2) 18 coupon amount (PMT) (1000*5%/2) 25 Face value (FV) 1000…

Q: What is the yield to maturity on a 10-year, 9 percent annual coupon, $1,000 par value bond that…

A: Yield to maturity(YTM) is the rate of return on bond that is obtained if bond is held till maturity.…

Q: Nesmith Corporation's outstanding bonds have a $1,000 par value, a 10% semiannual coupon, 19 years…

A: Semiannual interest = Par value * Rate * Time Semiannual interest = $1,000 * 0.10 * 6/12 Semiannual…

Q: ABC Motors' bonds have 19 years remaining to maturity. Interest is paid semi-annually, they have a…

A: Data given:: Par Value = $1,000 Coupon interest rate = 5% (paid semi-annually) = 5%/2 = 2.5% = 0.025…

Q: Assume that a company issued a bond with $1,000 face value, 10% coupon rate, 20 years maturity, if…

A: Face Vale = 1000 Coupon = Coupon Rate × Face Value = 10 × 1000 = 100 Total Time Period = 20 years…

Q: Carrie's clothes, has a five year bond oustanding that pay $60 annually. The face value of each bond…

A: a.Calculation of Coupon Rate of Bond:

Q: Nesmith Corporation's outstanding bonds have a $1,000 par value, an 10% semiannual coupon, 20 years…

A: Yield to maturity (20*2) 40 coupon amount (PMT) = 10%*1000/2 50 Face value (FV) 1000 Yield…

Q: a coproration bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a…

A: Corporate bond refers to the bond issued by a corporation in order to elevate financing for many…

Q: A $1,100-face-value bond has a 5% coupon rate, itscurrent price is $1,040, and it is expected to…

A: Current yield = Annual coupon payment / Current market price of bond Annual coupon payment = Face…

Q: What's the bond current $price?

A: Bonds Price: The price of the bond is the discounted worth of all the future cash flows generated…

Q: what is the YTM?

A: YTM is that rate where investor earns total return on a bond if he holds the bond till maturity. It…

Q: Suppose a 10-year, $1,000 bond with an 8.4% coupon rate and semi-annual coupons is trading for a…

A: The bond's yield to maturity is the interest rate at which, when the future benefits to be received…

Q: Callaghan Motors' bonds have 5 years remaining to maturity. Interest is paid annually, they have a…

A: The current price of a bond is the present value of its expected future cash flow which is…

Q: The Petit Chef Co. has 10.8 percent coupon bonds on the market with eight years left to maturity.…

A: total percentage = 10.8% n = 8 years par value = 1000 bond price = 1129.70 here

Q: what is the approximate yeild to maturiy (ytm)of bond that is currently selling for $1,150 in the…

A: Annual interest payments ($1000*14%) $140

Q: Bernard co. has 7% coupon bonds on the market that have 13 years left to maturity. The bonds will…

A: Current bond price will be equal to present value of Maturity Value and present value of interest…

Q: Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 7 years to…

A: Given Information Par Value of Bonds =$1,000 Semi-annual Coupon rate =7% Years to maturity= 7 YTM=9%

Q: Miles Corporation's bonds have a 15-year maturity, an 8% semi-annual coupon, and a par value of…

A: The amount that the bondholder expects in order to invest in bonds at the time of maturity is…

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: 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 Baxter, Inc.'s bond has a 4 percent coupon and pays interest semi-annually. The face value is…

A: Details given are as follows: Coupon rate = 4% Face value =$1000 Current price (Present value) =…

Q: A corporate bond is currently quoted at a price of $1197.93 and carries a 10 percent annual coupon…

A: Bonds are debt instruments issued by companies. Bond pays periodic fixed coupon payments.

Q: Smithson Co.'s Class A bonds have 10 years to go until maturity. They have a $1,000 face value and…

A: In the given problem we require to compute the bond's yield to maturity.

Q: Arnot International’s bonds have a current market price of $1,200. The bondshave an 11% annual…

A: Yield to maturity (YTM), indicates the amount that an investor can earn at the bonds' maturity.

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: National Co. has outstanding bonds with an annual 8 percent coupon. The bonds have a par value of…

A: Par value = P1000 Coupon rate = 8% Annual coupon amount = 1000*0.08= P80 Years to maturity = 11…

Q: Nesmith Corporation's outstanding bonds have a $1,000 par value, a 11% semiannual coupon, 6 years to…

A: BondIt is the instrument of the indebtedness of an issuer of the bond to the holders of the bond.

Q: Nesmith Corporation's outstanding bonds have a $1,000 par value, an 12% semiannual coupon, 9 years…

A: Bond price: Bond price is the current price of the payment. Payment includes coupon payment and…

Q: ABC Corp issued a bond with a maturity of 12 years. It has a 9 percent annual coupon, a yield to…

A: Face value (FV) = P1000 Coupon rate = 9% Yield to maturity (r) = 8% Years to maturity (n) = 12 Years…

Q: A bond makes two $45 coupon payments each year. Given the bond's par value is $1,000 and its price…

A: Given, Semi -annual coupon =$45

Q: the

Q: Alshon, Inc. has 6.00% coupon bonds that have 11 years left until maturity. The bonds make annual…

A: Compute the current bond price:The current bond price is $897.08.Excel spread sheet:The future value…

Q: A bond matures in 15 years and pays an 8 percent annual coupon. The bond has a face value of $1,000…

A: Current yield = coupon price /current market price Yield on bond is rate we earn if we held the bond…

Q: Nesmith Corporation's outstanding bonds have a $1,000 par value, a 10% semiannual coupon, 19 years…

A: Information given in the question is as follows: Par Value = $1000 Coupon Rate = 10% Coupon…

Q: What is the yield to maturity for the following bond: current price is $908, coupon rate is 11…

A: Here, Present value (PV) = $908 Maturity value (FV) = $1,000 Coupon rate = 11% Time to maturity (n)…

Q: Assume the coupon rate is 10% issue at par $1000 and for 15 years. Let say the market interest rate…

A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…

Q: A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with…

A: According to the general finance rule, the intrinsic value of financial security represents a sum of…

Q: Madsen Motors's bonds have 9 years remaining to maturity. Interest is paid annually, they have a…

A: The market price of the bond will be the present value of the remaining coupons and the face value.

Q: Hartwell Corporation’s bonds have a 20-year maturity, an 8% semiannual coupon,and a face value of…

A: The current price of the bond is the present value of its expected future cash flow which is…

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: A 15-year bond has a $1,000 par value bond, a 4 percent coupon, and a yield to maturity of 3.3…

A: Calculating the current price of bond. We have,Current price of bond = C [1 – (1 / (1+r)n ] / r +…

Q: Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of…

A: Current price of the bond is the present value of future payments at a given interest rate. Future…

Q: Nesmith Corporation’s outstanding bonds have a $1,000 par value, an8% semiannual coupon, 14 years to…

A: Bonds are instruments used by organizations to get debt funds from public. Bonds pay regular coupons…

Q: Lincoln Park Co. has a bond outstanding with a coupon rate of 5.34 percent and semiannual payments.…

A: A bond is a debt instrument that pays interest payments periodically as per the predetermined coupon…

Question

Assume the bonds par is $1000.

A 13 yr bond is selling at $1,040 and its coupn is paid semi annually. If the YTM is 9%, what is the coupon rate? Please show the steps.

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

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

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?
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?
Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
Waylan Sisters Inc. issued 3-year bonds with a par value of $100,000 and a 6% annual coupon when the market rate of interest was 5%. If the bonds sold at 102.438, how much cash did Williams Sisters Inc. receive from issuing the bonds?