Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8...

Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8 percent paid semiannually and 14 years to maturity. The yield to maturity of the bond is 6.4 percent.

What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Bond price

Solutions

Expert Solution

Semiannual interest = $5,000 * 0.058 * 6/12 = $145

Current bond price = $145(PVIFA 3.2%,28) + $5,000(PVIF 3.2%,28)

Current bond price = ($145 * 18.3134492198) + ($5,000 * 0.4139696248)

Current bond price = $4,725.30

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.4...

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.4 percent paid semiannually and 13 years to maturity. The yield to maturity of the bond is 4.8 percent. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9%...

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9% paid semiannually and 13 years to maturity. The yield to maturity is 3.8%. What is the price of the bond?

A $ 5,000 bond with a coupon rate of 5.8% paid semiannually has tenten years to...

A $ 5,000 bond with a coupon rate of 5.8% paid semiannually has tenten years to maturity and a yield to maturity of 7%. If interest rates rise and the yield to maturity increases to 7.3%, what will happen to the price of the bond?

An inflation-indexed Treasury bond has a par value of $5,000 and a coupon rate of 7...

An inflation-indexed Treasury bond has a par value of $5,000 and a coupon rate of 7 percent. An investor purchases this bond and holds it for one year. During the year, the consumer price index decreases by 1.5 percent first six months of the year, and by 2.25 percent during the second six months of the year due to a deflation. What are the total interest payments the investor will receive during the year? TYPE ANSWER AND SHOW THE WORK

A zero coupon bond has a par value of $10,000 and a current price of $5,000....

A zero coupon bond has a par value of $10,000 and a current price of $5,000. If the bond has 8 years to maturity, what is its after- tax yield to maturity for an investor paying 25% taxes? A. 4.4% B. 4.9%C. 5.2% D. 6.6% E. 6.8%

Bond Valuation: Venchi Industries has outstanding a $1,000 par-value bond with an 8% coupon interest rate....

Bond Valuation: Venchi Industries has outstanding a $1,000 par-value bond with an 8% coupon interest rate. The bond has 12 years remaining to its maturity date. If interest is paid annually, find the value of the bond when required return is (1) 7%, (2) 8%, (3) 10%. Indicate for each case in part a whether the bond is selling at a discount, at a premium, or its par value. Using the 10% required return, find the bonds value when interest...

Bond valuation Lahey Industries has outstanding a $1,000 par-value bond with an •8% coupon interest rate....

Bond valuation Lahey Industries has outstanding a $1,000 par-value bond with an •8% coupon interest rate. The bond has 12 years remaining to its maturity date. •a. If interest is paid annually, find the value of the bond when the required return is (1) 7%, (2) 8%, and (3) 10%. •b. Indicate for each case in part a whether the bond is selling at a discount, at a premium, or at its par value. •c. Using the 10% required return,...

Tinker Corp.’s outstanding bond has a coupon rate of 8 percent and a face value of...

Tinker Corp.’s outstanding bond has a coupon rate of 8 percent and a face value of $1000. The bond matures in six years. Investors require a rate of return equal to 12 percent and interest is paid semiannually. What should be the market price of Tinker’s bond?

Bond A has a face value of $5,000, a coupon rate of 2%, and a maturity...

Bond A has a face value of $5,000, a coupon rate of 2%, and a maturity date of five years. Bond B has a face value of $4,000, a coupon rate of 10%, and a maturity date of 10 years. Bond C has a face value of $4,500, a coupon rate of 3%, and a maturity date of four years. If these bonds are being sold for $6,300 each, which should you buy? Assume that the prevailing interest rate is...

A. Allied Banks has outstanding a RS 1,000 par-value bond with a 7% coupon interest rate....

A. Allied Banks has outstanding a RS 1,000 par-value bond with a 7% coupon interest rate. The bond has 10 years remaining to its maturity date.a. If interest is paid annually, find the value of the bond when the required return is(1) 7%, (2) 5%, and (3) 10%. b. Indicate for each case in part a whether the bond is selling at a discount, at a premium, or at its par value.

Subjects