Odd Co. issued a 12-year bond with 0.08 yield to maturity and a 7% coupon rate. The par value of the bond Odd co. issue is P1,000. What discount rate will be used to get the price of the bond? 7% coupon rate 8% current yield 8% yield to maturity 7% nominal rate What is the price of the bond of Odd Co. today? 64 64 64 1,000 On the 10th year, the bond has a price of 16 54 16 1,000 On the 12th year, the bond has a price of 1,000 16 54 16

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
Problem 14PROB
icon
Related questions
Question

Odd Co. issued a 12-year bond with 0.08 yield to maturity and a 7% coupon rate. The par value of the bond Odd co. issue is P1,000.

  1. What discount rate will be used to get the price of the bond?
    1. 7% coupon rate
    2. 8% current yield
    3. 8% yield to maturity
    4. 7% nominal rate
  1. What is the price of the bond of Odd Co. today?
    1. 64
    2. 64
    3. 64
    4. 1,000
  2. On the 10th year, the bond has a price of
    1. 16
    2. 54
    3. 16
    4. 1,000
  3. On the 12th year, the bond has a price of
    1. 1,000
    2. 16
    3. 54
    4. 16
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 2 images

Blurred answer
Knowledge Booster
Rate Of Return
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.
Recommended textbooks for you
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Fundamentals Of Financial Management, Concise Edi…
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning