Question
In: Finance
Madsen Motors's bonds have 20 years remaining to maturity. Interest is paid annually, they have a...
Madsen Motors's bonds have 20 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 6%, and the yield to maturity is 8%. What is the bond's current market price? Round your answer to the nearest cent.
Solutions
Expert Solution
| Computation Of Bond Price | ||
| a | Annual Coupon Amount | $ 60.00 |
| b | Present Value Annuity Factor for (20 Years,8%) | 9.818147 |
| c | Present Value Of Annual Interest (a*b) | $ 589.09 |
| d | Redemption Value | $ 1,000.00 |
| e | Present Value Of (20 Years,8%) | 0.21455 |
| g | Present Value Of Redemption Amount (d*e) | $ 214.55 |
| f | Bond Price(c+g) | $ 803.64 |
jeff jeffy answered 2 years agoRelated Solutions
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Madsen Motors's bonds have 20 years remaining to maturity.
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Madsen Motors's bonds have 20 years remaining to maturity. Interest is paid annually, they have a...
Madsen Motors's bonds have 20 years remaining to maturity.
Interest is paid annually, they have a $1,000 par value, the coupon
interest rate is 6%, and the yield to maturity is 8%. What is the
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BOND VALUATION Madsen Motors's bonds have 20 years remaining to maturity. Interest is paid annually; they...
BOND VALUATION
Madsen Motors's bonds have 20 years remaining to maturity.
Interest is paid annually; they have a $1,000 par value; the coupon
interest rate is 7.5%; and the yield to maturity is 11%. What is
the bond's current market price? Round your answer to the nearest
cent.
Madsen Motors's bonds have 13 years remaining to maturity. Interest is paid annually; they have a...
Madsen Motors's bonds have 13 years remaining to maturity.
Interest is paid annually; they have a $1,000 par value; the coupon
interest rate is 11%; and the yield to maturity is 9%. What is the
bond's current market price? Round your answer to the nearest
cent.
Madsen Motors's bonds have 25 years remaining to maturity. Interest is paid annually, they have a...
Madsen Motors's bonds have 25 years remaining to maturity.
Interest is paid annually, they have a $1,000 par value, the coupon
interest rate is 11%, and the yield to maturity is 12%. What is the
bond's current market price? Round your answer to the nearest
cent.
Madsen Motors's bonds have 23 years remaining to maturity. Interest is paid annually; they have a...
Madsen Motors's bonds have 23 years remaining to maturity.
Interest is paid annually; they have a $1,000 par value; the coupon
interest rate is 7.5%; and the yield to maturity is 13%. What is
the bond's current market price? Round your answer to the nearest
cent.
$
Madsen Motors's bonds have 21 years remaining to maturity. Interest is paid annually, they have a...
Madsen Motors's bonds have 21 years remaining to maturity.
Interest is paid annually, they have a $1,000 par value, the coupon
interest rate is 12%, and the yield to maturity is 13%. What is the
bond's current market price? Round your answer to the nearest
cent.
Madsen Motors's bonds have 23 years remaining to maturity. Interest is paid annually, they have a...
Madsen Motors's bonds have 23 years remaining to maturity.
Interest is paid annually, they have a $1,000 par value, the coupon
interest rate is 12%, and the yield to maturity is 13%. What is the
bond's current market price? Round your answer to the nearest
cent.
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Madsen Motors's bonds have 22 years remaining to
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Madsen Motors's bonds have 19 years remaining to maturity. Interest is paid annually; they have a...
Madsen Motors's bonds have 19 years remaining to maturity.
Interest is paid annually; they have a $1,000 par value; the coupon
interest rate is 8.5%; and the yield to maturity is 12%. What is
the bond's current market price? Round your answer to the nearest
cent.
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