In: Finance
A 6% annual coupon bond has 11 years remaining until maturity. Par value is $1000. | |||||
The required rate of return (yield to maturity)on the bond is 8.5%. | |||||
Compute the price of the bond today using the appropriate Excel formula | |||||
Compute the price of the same bond if it has 10 years remaining to maturity instead of 11. | |||||
What is the capital gains yield on the bond? | |||||
What is the current yield on the bond? | |||||
What is the total yield on the bond? | |||||
What will the bond's price be at the instant before it matures? | |||||
SHOW WORK HERE, HIGHLIGHT FINAL ANSWERS IN YELLOW | |||||
11 years | 10 years | ||||
PV | |||||
RATE | |||||
NPER | |||||
PMT | |||||
FV | |||||
As per rules I am answering the first 4 subparts of the question
11 years | 10 years | |
PV | $825.78 | $835.97 |
RATE | 8.50% | 8.50% |
NPER | 11 | 10 |
PMT | 60 | 60 |
FV | 1000 | 1000 |
Q No | ||
1 | Compute the price of the bond today using the appropriate Excel formula | $825.78 |
2 | Compute the price of the same bond if it has 10 years remaining to maturity instead of 11. | $835.97 |
3 | What is the capital gains yield on the bond? | 1.23% |
4 | What is the current yield on the bond? | 7.27% |
WORKINGS