A $1,000 face value bond currently has a yield to maturity of 11 percent. The bond...

A $1,000 face value bond currently has a yield to maturity of 11 percent. The bond matures in 14 years and pays interest annually. The coupon rate is 9 percent. What is the current price of this bond?

Expert Solution

Answer

Bond price = C*1-(1+r)^-1/r+F/(1+r)ⁿ

F(face value) =1000

Coupon rate =9%

C(coupon amount) =1000*9%

=90

r(YTM) =11%

n=14 years

Bond price = 90*(1-(1+0.11)^-14) /0.11+1000/(1+0.11)¹⁴

Bond price =860.36

jeff jeffy answered 2 years ago

A $1,000 face value bond currently has a yield to maturity of 6.25 percent. The bond...

A $1,000 face value bond currently has a yield to maturity of 6.25 percent. The bond matures in 3 years and pays interest annually. The coupon rate is 7 percent. What is the current price of this bond?

1) A $1,000 face value bond currently has a yield to maturity of 8.22 percent. The...

1) A $1,000 face value bond currently has a yield to maturity of 8.22 percent. The bond matures in 7 years and pays interest semiannually. The coupon rate is 7.5 percent. What is the current price of this bond? A) $962.25 B) $917.96 C) $1,100.13 D) $848.01 E) $1,105.26 2) JetNet bonds have a face value of $1,000, a coupon rate of 6.5 percent, semiannual interest payments, and mature in 11.5 years. What is the current price of these bonds...

1. A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The...

1. A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond matures in three years and pays interest annually. The coupon rate is 7 percent. What is the current price of this bond? 2. UFS print corporation is expected to pay annual dividends of $1.90 and $2.10 over the next two years, respectively. After that, the company expects to pay a constant dividend of $2.30 a share. What is the value of this stock...

A $1,000 face value bond has a yield to maturity of 12.72%. The bond has a...

A $1,000 face value bond has a yield to maturity of 12.72%. The bond has a coupon rate of 13% and pays semiannual coupons/ The bond matures in 7 years. What is the price of the bond?

A $1000 face value bond currently has a yield to maturity of 6.69%. The bond matures...

A $1000 face value bond currently has a yield to maturity of 6.69%. The bond matures in three years and pays interest annually. The coupon rate is 7%. What is the current price of this bond?

Current yield and yield to maturity An annual coupon bond has a $1,000 face value, coupon...

Current yield and yield to maturity An annual coupon bond has a $1,000 face value, coupon rate of 5%, will mature in 10 years, and currently sells for $810.34. a. What is the yield to maturity of the bond? b. What is the current yield of the bond? c. Why does the current yield differ from the yield to maturity? d. One year later, the market rates have increased to 8%. Assume that you have just received a coupon payment...

A bond has $1,000 face value, coupon rate of 3.5%, and yield to maturity (YTM) of...

A bond has $1,000 face value, coupon rate of 3.5%, and yield to maturity (YTM) of 3.7%. It will mature in 17 years and coupons are paid annually. What is this bond’s current yield?

What is the yield to maturity of a $1,000 par value bond that is currently selling...

What is the yield to maturity of a $1,000 par value bond that is currently selling for $1,362 if the annual coupon rate is 6.8% and the bond has 14 years to maturity?

A bond has a face value of $1,000, an annual coupon rate of 5 percent, yield...

A bond has a face value of $1,000, an annual coupon rate of 5 percent, yield to maturity of 10 percent, and 10 years to maturity Calculate the bond's duration.

What is the yield to maturity on a $1,000 par value bond 9 ⅛ percent Intercontinental...

What is the yield to maturity on a $1,000 par value bond 9 ⅛ percent Intercontinental Hotels Group bond if the investor buys the bonds at the following market prices? Assume the coupon is paid annually and the bond matures in 6 years. a.$1,125.00 b.$1,000 c.$962.00

Question