Today, you bought one corporate semiannual bond with $1,000 par value, 8% coupon rate, 8 years left to maturity. The yield to maturity (YTM) of the bond is 10% today. Suppose the issuing firm does not default on the bond in the next 8 years.How much interest (not just coupon) in total should the issuing firm pay you in the next five years?
Today, you bought one corporate semiannual bond with $1,000 par value, 8% coupon rate, 8 years left to maturity. The yield to maturity (YTM) of the bond is 10% today. Suppose the issuing firm does not default on the bond in the next 8 years.How much interest (not just coupon) in total should the issuing firm pay you in the next five years?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 15P
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Today, you bought one corporate semiannual bond with $1,000 par value, 8% coupon rate, 8 years left to maturity. The yield to maturity (YTM) of the bond is 10% today. Suppose the issuing firm does not default on the bond in the next 8 years.How much interest (not just coupon) in total should the issuing firm pay you in the next five years?
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