You own a 25-year, 6.4% annual coupon bond with $1,000 face value. If the yield to...

You own a 25-year, 6.4% annual coupon bond with $1,000 face value. If the yield to maturity is 3.3%, how much is it worth? Round to the nearest cent.

Solutions

Expert Solution

Value of bond=coupon*present value annuity factor(years, yield)+face value*present value inflow factor(years, yield)

Coupon=$1000*6.4%=$64

Value=64*present value annuity factor(25 years, 3.3%)+1000*present value inflow factor(25 years, 3.3%)

=64*16.8451+1000*0.4441

=1078.09+444.1

=$1522.19

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

You own a 29-year, 2.6% annual coupon bond with $1,000 face value. If the yield to...

You own a 29-year, 2.6% annual coupon bond with $1,000 face value. If the yield to maturity is 7.1%, how much is it worth? Round to the nearest cent.

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...

An annual bond has a face value of $1,000, a coupon rate of 7.4%, a yield...

An annual bond has a face value of $1,000, a coupon rate of 7.4%, a yield to maturity of 6.2% and has 12 years remaining to maturity. What is the price of the bond?

You bought a 10-year zero-coupon bond with a face value of $1,000 and a yield to...

You bought a 10-year zero-coupon bond with a face value of $1,000 and a yield to maturity of 2.7% (EAR). You keep the bond for 5 years before selling it. a:What was the price of the bond when you bought it? b:What is your personal 5-year rate of return if the yield to maturity is still 2.7% when you sell the bond? (i.e. what is your rate of return given what you sold it for at the end of year...

An 11-year, $1,000 face value bond has an annual coupon rate of 8% and its yield...

An 11-year, $1,000 face value bond has an annual coupon rate of 8% and its yield to maturity is 7.5%. The bond can be called 3 years from now at a price of $1,060. What is the bond’s nominal yield to call?

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.

You own a 2-year bond that has a face value of $1,000 with a coupon rate...

You own a 2-year bond that has a face value of $1,000 with a coupon rate of 3.5%. If you sell it for $973, what is the current interest rate? Show your work and keep your answer to 2 decimal places if necessary

1.You own a 10-year, 3% semi-annual coupon bond with $100 face value. If its yield to...

1.You own a 10-year, 3% semi-annual coupon bond with $100 face value. If its yield to maturity is 5.3%, what percentage of its value comes from coupon payments?

A 20-year, $1,000 par value bond has a 6.4% annual payment coupon. The bond currently sells...

A 20-year, $1,000 par value bond has a 6.4% annual payment coupon. The bond currently sells for $1,080. If the yield to maturity remains at its current rate, what will the price be 4 years from now? A 7 percent corporate bond that pays interest semi-annually was issued last year. Which two of the following most likely apply to this bond today if the current yield-to-maturity is 6 percent? I. a structure as an interest-only loan II. a current yield...

A bond has a face value of $1,000, a coupon rate of 8%, and a yield...

A bond has a face value of $1,000, a coupon rate of 8%, and a yield to maturity of 9.5%. If the bond matures in 8 years, what is the price of the bond? (Assume coupons are paid annually.)

Subjects