ALLSTON Corporation’s bonds have 15 years remaining to maturity and these bonds have $1,000 par value and a coupon rate of 10%. The bonds have a yield to maturity of 8%: What is the current market price of those bonds? if interest is paid annually (6 marks) if interest is paid semi-annually (7 marks)

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
Problem 12PROB
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Question 1

  1.  

ALLSTON Corporation’s bonds have 15 years remaining to maturity and these bonds

have $1,000 par value and a coupon rate of 10%. The bonds have a yield to maturity of

8%: What is the current market price of those bonds?

  1. if interest is paid annually (6 marks)
  2. if interest is paid semi-annually (7 marks)
  3.  

KENNEDY bonds have 14 years to maturity and have a par value of $1,000 and coupon

rate of 12%. If the bonds sell for $850 and the coupon interest rate is 10%; what is their

yield to maturity?

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KENNEDY bonds have 14 years to maturity and have a par value of $1,000 and coupon

rate of 12%. If the bonds sell for $850 and the coupon interest rate is 10%; what is their

yield to maturity?

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