Question
In: Finance
Calculate the value of a $1,000-par-value bond paying quarterly interest at an annual coupon interest rate...
Calculate the value of a $1,000-par-value bond paying quarterly interest at an annual coupon interest rate of 8% and having 15 years until maturity if the required return on similar-risk bonds is currently a 16% annual rate paid quarterly.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A bond with a par value of $1,000 has a 6% coupon rate with semi-annual coupon...
A bond with a par value of $1,000 has a 6% coupon rate with
semi-annual coupon payments made on July 1 and January 1. If the
bond changes hands on November 1, which of the following is true
with respect to accrued interest?
The buyer will pay the seller $20 of accrued interest
The seller will pay the buyer $20 of accrued interest
The buyer will pay the seller $10 of accrued interest
The seller will pay the buyer $10...
Consider a bond (with par value = $1,000) paying a coupon rate of 8% per year...
Consider a bond (with par value = $1,000) paying a coupon rate
of 8% per year semiannually when the market interest rate is only
5% per half-year. The bond has three years until maturity.
a. Find the bond's price today and six months from now after the
next coupon is paid. (Round your answers to 2 decimal places.)
Current price
Price after 6 months
b. What is the total (six-month) rate of return on the bond? (Do
not round intermediate...
Consider a bond (with par value = $1,000) paying a coupon rate of 9% per year...
Consider a bond (with par value = $1,000) paying a coupon rate
of 9% per year semiannually when the market interest rate is only
5% per half-year. The bond has three years until maturity.
a. Find the bond's price today and six months
from now after the next coupon is paid. (Round your answers
to 2 decimal places.)
b. What is the total (six-month) rate of return
on the bond? (Do not round intermediate calculations. Round
your answer to the...
Consider a bond (with par value = $1,000) paying a coupon rate of 9% per year...
Consider a bond (with par value = $1,000) paying a coupon rate
of 9% per year semiannually when the market interest rate is only
7% per half-year. The bond has three years until maturity.
a. Find the bond's price today and six months
from now after the next coupon is paid. (Round your answers
to 2 decimal places.)
b. What is the total (six-month) rate of return
on the bond? (Do not round intermediate calculations. Round
your answer to the...
Consider a $1,000 par value bond with a 7% annual coupon. The bond pays interest annually....
Consider a $1,000 par value bond with a 7% annual coupon. The
bond pays interest annually. There are 20 years remaining until
maturity. You have expectations that in 5 years the YTM on a
15-year bond with similar risk will be 7.5%. You plan to purchase
the bond now and hold it for 5 years. Your required return on this
bond is 10%. How much would you be willing to pay for this bond
today? Select one:
a. $820
b....
A bond that matures in 13 years has a $1,000 par value. The annual coupon interest...
A bond that matures in 13 years has a $1,000 par value. The
annual coupon interest rate is 11 percent and the market's
required yield to maturity on a comparable-risk bond is 17
percent.
a. What would be the value of this bond if it paid interest
annually?
b. What would be the value of this bond if it paid interest
semiannually?
A bond matures in 8 years, Par value = $1,000, and coupon annual interest payment =...
A bond matures in 8 years, Par value =
$1,000, and coupon annual interest payment = $65. Yield to maturity
of this bond is 8.2% (yield, or annual return). What is the bond's
price?
a. $903.04
b. $925.26
c. $948.67
d. $972.84
A bond that matures in 14 years has a $1,000 par value. The annual coupon interest...
A bond that matures in 14 years has a $1,000 par value. The
annual coupon interest rate is 11 percent and the market's
required yield to maturity on a comparable-risk bond is 14
percent. What would be the value of this bond if it paid interest
annually? What would be the value of this bond if it paid interest
semiannually?
The value of this bond if it paid interest annually would be$
_____ The value of this bond if it...
A bond that matures in 18 years has a $1,000 par value. The annual coupon interest...
A bond that matures in 18 years has a $1,000 par value. The
annual coupon interest rate is 14 percent and the market's
required yield to maturity on a comparable-risk bond is 15
percent. What would be the value of this bond if it paid interest
annually? What would be the value of this bond if it paid interest
semiannually?
A bond that matures in 19 years has a $1,000 par value. The annual coupon interest...
A bond that matures in 19 years has a $1,000 par value. The
annual coupon interest rate is 12 percent and the market's
required yield to maturity on a comparable-risk bond is 17
percent. What would be the value of this bond if it paid interest
annually? What would be the value of this bond if it paid interest
semiannually?
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