A bond with 22 years until maturity has a coupon rate of 7.8 percent and a...

A bond with 22 years until maturity has a coupon rate of 7.8 percent and a yield to maturity of 6.3 percent. What is the price of the bond?

Solutions

Expert Solution

The price of the bond is calculated using the PV function as follows:-

=PV(rate,nper,pmt,fv)

=PV(6.3%,22,-7.8%*1000,-1000)

=1176.01

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

A bond has a coupon rate of 7% and has 5 years until maturity. If the...

A bond has a coupon rate of 7% and has 5 years until maturity. If the current yield to maturity is 5%, what is the price of the bond? What is the amount of the annual interest payment paid to the bondholder?

2. A bond has 10 years to maturity, a 7.8% annual coupon rate, and sells for...

2. A bond has 10 years to maturity, a 7.8% annual coupon rate, and sells for $985. Assume coupon payments are made semi-annually. (3 points) a. What is the current yield for this bond? b. What is the YTM? c. Assume that the YTM remains constant for the next 6 years. What will the price be 6 years from today? (Worked needed)

1. A bond has a coupon rate of 7% and has 5 years until maturity and...

1. A bond has a coupon rate of 7% and has 5 years until maturity and the yield to maturity is 5%. (4 points) a. What is the price of the bond? ___________________ (2 points) b. How much annual interest is paid to the bondholder? _____________ (2 points) 2. A zero-coupon bond with a 20-year maturity, has a yield to maturity of 6% and a par value of $100,000? a. What is the price of the bond? ______________. (2 points)...

A bond has a coupon rate of 6.5 percent and 5 years to maturity. It has...

A bond has a coupon rate of 6.5 percent and 5 years to maturity. It has a yield to maturity of 8 percent and is selling in the market for $940.11. This bond has a face value of $1000. What is the duration of this bond? Suppose the Augustina National Bank has assets with a duration of 6 years and liabilities with a duration of 3.0 years. This bank has $200 million in assets and $180 million in liabilities. What...

A bond has 8 years until maturity, a coupon rate of 8%, and sells for 1,100...

A bond has 8 years until maturity, a coupon rate of 8%, and sells for 1,100 a. If the bond has a yield to maturity of 8% 1 year from now, what will its price be? Price $ b. What will be the rate of return on the bond? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return % c. If the inflation rate during...

A municipal bond has 6 years until maturity and sells for $5,420. If the coupon rate...

A municipal bond has 6 years until maturity and sells for $5,420. If the coupon rate on the bond is 6.6 percent, what is the yield to maturity? Please explain each step thoroughly

You find a bond with 29 years until maturity that has a coupon rate of 9.5...

You find a bond with 29 years until maturity that has a coupon rate of 9.5 percent and a yield to maturity of 8.9 percent. Suppose the yield to maturity on the bond increases by 0.25 percent. a. What is the new price of the bond using duration and using the bond pricing formula? Estimated price: Actual price: b. Now suppose the original yield to maturity is increased by 1 percent. What is the new price of the bond? Estimated...

A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for...

A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. a/ If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time? b/ What will be the rate of return on the bond? c/ Now assume that interest is paid semiannually. What will be the rate of return on the bond? d/ If the inflation rate during the...

You find a bond with 25 years until maturity that has a coupon rate of 10.0...

You find a bond with 25 years until maturity that has a coupon rate of 10.0 percent and a yield to maturity of 8.5 percent. Suppose the yield to maturity on the bond increases by 0.25 percent. a. What is the new price of the bond using duration and using the bond pricing formula? (Do not round intermediate calculations. Round your answers to 2 decimal places.) estimate price actual price b. Now suppose the original yield to maturity is increased...

You find a bond with 27 years until maturity that has a coupon rate of 5.5...

You find a bond with 27 years until maturity that has a coupon rate of 5.5 percent and a yield to maturity of 5 percent. Suppose the yield to maturity on the bond increases by 0.25 percent. a. What is the new price of the bond using duration and using the bond pricing formula? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Estimated price: Actual price: b. Now suppose the original yield to maturity is increased...

Subjects