Knight, Inc., has issued a three-year bond that pays a coupon of 4.71 percent. Coupon payments...

Knight, Inc., has issued a three-year bond that pays a coupon of 4.71 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.98 percent, what is the market value of the bond?

Expert Solution

Computatio Of Value Of The Bond

a	Semi-annual Coupon Amount	$ 23.55
	($1000*4.71%/2)
b	Present Value Annuity Factor for (6 Years,2.49%)	5.509968
c	Present Value Of Annual Interest (a*b)	$ 129.76
d	Redemption Value	$ 1,000.00
e	Present Value Factor Of (6 Years,2.49%)	0.86280
g	Present Value Of Redemption Amount (d*e)	$ 862.80
f	Bond Value (c+g)	$ 992.56

jeff jeffy answered 2 years ago

Knight, Inc., has issued a three-year bond that pays a coupon of 4.15 percent. Coupon payments...

Knight, Inc., has issued a three-year bond that pays a coupon of 4.15 percent. Coupon payments are made semiannually. Given the market rate of interest of 3.78 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.) Market value $

1.Knight, Inc., has issued a three-year bond that pays a coupon of 6.09 percent. Coupon payments...

1.Knight, Inc., has issued a three-year bond that pays a coupon of 6.09 percent. Coupon payments are made semiannually. Given the market rate of interest of 5.92 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.) 2.Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 13.59 percent. If these bonds have a market price of $952.22, what yield to maturity and effective...

Bond price: Knight, inc, has issued a three year bond that pays a coupon rate of...

Bond price: Knight, inc, has issued a three year bond that pays a coupon rate of 6.10 percent coupon payments are made semiannually. Given the market rate of interest of 5.80 percent, what is the market value of the bond?

Cullumber, Inc., has issued a three-year bond that pays a coupon rate of 8.0 percent. Coupon...

Cullumber, Inc., has issued a three-year bond that pays a coupon rate of 8.0 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.6 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)

Showbiz, Inc., has issued eight-year bonds with a coupon of 6.375 percent and semiannual coupon payments....

Showbiz, Inc., has issued eight-year bonds with a coupon of 6.375 percent and semiannual coupon payments. Th e market’s required rate of return on such bonds is 7.65 percent. a. What is the market price of these bonds? b. If the above bond is callable aft er fi ve years at an 8.5 percent premium on the face value, what is the expected return on this bond?

XYZ Inc. has issued a 15-year bond that pays quarterly with a 4% coupon rate and...

XYZ Inc. has issued a 15-year bond that pays quarterly with a 4% coupon rate and a 5% market rate. What is the future value of the bond? PV FV PMT N I

Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 12 percent,...

Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 12 percent, has a YTM of 10 percent, and has 18 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond pays a coupon of 10 percent, has a YTM of 12 percent, and also has 18 years to maturity. What is the price of each bond today? (Do not round intermediate calculations and round your answers to 2 decimal places,...

Bond X is a premium bond making semiannual payments. The bond pays a 12 percent coupon,...

Bond X is a premium bond making semiannual payments. The bond pays a 12 percent coupon, has a YTM of 10 percent, and has 18 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 10 percent coupon, has a YTM of 12 percent, and also has 18 years to maturity. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to...

Bond X is a premium bond making annual payments. The bond pays an 8 percent coupon,...

Bond X is a premium bond making annual payments. The bond pays an 8 percent coupon, has a YTM of 6 percent, and has 13 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 6 percent coupon, has a YTM of 8 percent, and also has 13 years to maturity. If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In three years?...

A bond that pays coupons annually is issued with a coupon rate of 4 percent, maturity...

A bond that pays coupons annually is issued with a coupon rate of 4 percent, maturity of 30 years, and a yield to maturity of 7 percent. What annual rate of return will be earned in the following situations by an investor who purchases the bond and holds it for 4 year if the bond’s yield to maturity when the investor sells is 8 percent? a) All coupons were immediately consumed when received. b) All coupons were reinvested in your...

Question