2. A company holds a 20 year bond that was purchased at a premium. The bond...

2. A company holds a 20 year bond that was purchased at a premium. The bond pays semi-annual coupons. The face amount is equal to the redemption amount of $10,000. The amount of amortization of the premium (principal paid) in the 4th coupon was 80.21. The amount of amortization of the premium (principal paid) in the 7th coupon was 86.38. (a) (8 points) Find the yield rate. (b) (10 points) Find the price of the bond. (c) (6 points) Write the formula with values plugged in (but you do not need to evaluate) that you would use to find the book value (outstanding balance) after the 24th coupon.

Expert Solution

jeff jeffy answered 2 years ago

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