A 30-year 6.000% semi-annual coupon bond has a tenor of 13 years and a yield to maturity of 7.500%. In percent of PAR, what is the price of the bond today?

Solutions

Expert Solution

Par Value of Bond = $1,000

Annual Coupon Rate = 6.000%
Semiannual Coupon Rate = 3.000%
Semiannual Coupon = 3.000% * $1,000
Semiannual Coupon = $30

Time to Maturity = 13 years
Semiannual Period = 26

Annual YTM = 7.500%
Semiannual YTM = 3.75%

Current Price of Bond = $30 * PVIFA(3.75%, 26) + $1,000 * PVIF(3.75%, 26)
Current Price of Bond = $30 * (1 - (1/1.0375)^26) / 0.0375 + $1,000 * (1/1.0375)^26
Current Price of Bond = $30 * 16.427185 + $1,000 * 0.383981
Current Price of Bond = $876.80

Price in Percent of Par Value = Current Price of Bond / Par Value of Bond
Price in Percent of Par Value = $876.80 / $1,000
Price in Percent of Par Value = 87.68%

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

A 30-year 6.000% semi-annual coupon bond has a current price of 103.212% of PAR.

A 30-year 6.000% semi-annual coupon bond has a current price of 103.212% of PAR. If the tenor of the bond is 14 years, what must the yield to maturity be?

A 30-year 5.000% semi-annual coupon bond has a yield to maturity of 8.000%.

A 30-year 5.000% semi-annual coupon bond has a yield to maturity of 8.000%. If the current price is 85.618% of PAR, what must be the tenor, in years?2. (5 pts) A 30-year 5.000% semi-annual coupon bond has a yield to maturity of 8.000%. If the current price is 85.618% of PAR, what must be the tenor, in years?

The semi-annual bond for Williams Co. matures in 13 years, has a yield to maturity of...

The semi-annual bond for Williams Co. matures in 13 years, has a yield to maturity of 5.4%, and is trading at 96.815% of par. (To get the Price of the bond, take the 96.815% and multiply it by its par value of $1000. Use $1,000 as the future value) What is the coupon rate for the Williams Co. bond? Give your answer as a coupon percent.

The market price of a semi-annual pay bond is $987.44. It has 10.00 years to maturity and a coupon rate of 7.00%. Par value is $1,000. What is the effective annual yield?

a. The market price of a semi-annual pay bond is $987.44. It has 10.00 years to maturity and a coupon rate of 7.00%. Par value is $1,000. What is the effective annual yield?b. A firm just paid a dividend of $2.79. The dividend is expected to grow at a constant rate of 2.75% forever and the required rate of return is 12.00%. What is the value of the stock?

A 10-year bond has a 10 percent annual coupon and a yield to maturity of...

A 10-year bond has a 10 percent annual coupon and a yield to maturity of 12 percent. The bond can be called in 5 years at a call price of $1,050 and the bond’s face value is $1,000. Which of the following statements is most correct? Please explain why. a. The bond’s current yield is greater than 10 percent. b. The bond’s yield to call is less than 12 percent. c. The bond is selling at...

A bond has a $1,000 par value, 7 years to maturity, and a 12% semi-annual coupon...

A bond has a $1,000 par value, 7 years to maturity, and a 12% semi-annual coupon and sells for $947. What is its yield to maturity (YTM)?

What is the yield-to-maturity of a $1,000, 7% semi-annual coupon bond that matures in 20 years...

What is the yield-to-maturity of a $1,000, 7% semi-annual coupon bond that matures in 20 years and currently sells for $990? 7.7% 7.1% 3.55% 14.15%

What is the yield to maturity on the following: 10 year bond, 7.5% annual coupon, par...

What is the yield to maturity on the following: 10 year bond, 7.5% annual coupon, par value of $1,000, selling for $813.12 a. 9.88% b. 10.25% c. 10.51% d. 10.62% e. 11.07%

What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity...

What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 119% with coupons rate of 10%? Assume the par value of the bond is $1,000

3. A $1,000 par bond has a 5% semi-annual coupon and 12 years to maturity. Bonds...

3. A $1,000 par bond has a 5% semi-annual coupon and 12 years to maturity. Bonds of similar risk are currently yielding 6.5%. a. What should be the current price of the bond? b. If the bond’s price five years from now is $1,105, what would be the yield to maturity for the bond at that time? c. What will the price of this bond be 1 year prior to maturity if its yield to maturity is the same as...

Subjects