What is the purchase price of a 9,000 bond with dividend rate at 7%, compounded semiannually on August 1 and February 1, redeemable at 109 on August 1, 1995 was purchased on February 1, 1985 to yield 6% compounded semi-annually? (Bond Valuation) 3. What is the purchase price of a 9,000 bond with dividend rate at 7%, compounded semi-annually on August 1 and February 1, redeemable at 109 on August 1, 1995 waspurchased on February 1, 1985 to yield 6% compounded semi-annually?(Bond Valuation)

Par value (FV) = 9,000 Coupon rate = 7% Semi annual payment (C) = 9000*0.07/2 = $ 315 Period from…

What is the purchase price of a 9,000 bond with dividend rate at 7%, compounded semiannually on August 1 and February 1, redeemable at 109 on August 1, 1995 was purchased on February 1, 1985 to yield 6% compounded semi-annually? (Bond Valuation)

What is the purchase price of a 9,000 bond with dividend rate at 7%, compounded semiannually on August 1 and February 1, redeemable at 109 on August 1, 1995 was purchased on February 1, 1985 to yield 6% compounded semi-annually? (Bond Valuation)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

3. What is the purchase price of a 9,000 bond with dividend rate at 7%, compounded semi-
annually on August 1 and February 1, redeemable at 109 on August 1, 1995 was
purchased on February 1, 1985 to yield 6% compounded semi-annually?(Bond Valuation)

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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