What is the current value of a bond with a YTM of 6%, a par value of $1000, 12.5 years remaining to maturity, makes semi-annual coupon payments, and has a coupon rate of 4%? Multiple Choice $488.67 $1,500.00 $655.13 $1,157.29 $825 87

What is the current value of a bond with a YTM of 6%, a par value of $1000, 12.5 years remaining to maturity, makes semi-annual coupon payments, and has a coupon rate of 4%? Multiple Choice $488.67 $1,500.00 $655.13 $1,157.29 $825 87

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

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

Subject:- finance

What is the current value of a bond with a YTM of 6%, a par value of $1000, 12.5 years remaining to maturity, makes semi-annual coupon payments, and
has a coupon rate of 4%?
Multiple Choice
$488.67
$1,500.00
$655.13
$1,157.29
$825 87

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