Question

In: Finance

A bond has a par value of $1,000, a current yield of 8.27 percent, and semiannual...

A bond has a par value of $1,000, a current yield of 8.27 percent, and semiannual coupon payments. The bond is quoted at 104.29. What is the coupon rate of the bond?

Solutions

Expert Solution

Current yield of bond = Annual coupon/Current price of bond

Current price of bond = 104.29% * $1000 = $1,042.90

8.27% = Annual coupon/$1,042.90

Annual Coupon = 8.27% * $1,042.90

Annual coupon = $86.25

Annual Coupon rate = $86.25/$1000 = 8.62%

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

What is the current yield for a Bond with a $1,000 par value bond, with an...
What is the current yield for a Bond with a $1,000 par value bond, with an 10% annual coupon that matures in 15 years if the interest rate is 8%?
A 6 percent coupon bond that has a $1,000 par value, semiannual coupon payments and a...
A 6 percent coupon bond that has a $1,000 par value, semiannual coupon payments and a yield to maturity of 5.25 percent. The bond matures in 9 years. What is the price of the bond, What will happen to the price if market interest rates rise to 6.45 percent, what can you say about the relationship between the price of a bond and the market interest rate?
2. A bond has a $1,000 par value, semiannual interest payments of $45, and a current...
2. A bond has a $1,000 par value, semiannual interest payments of $45, and a current market value of $1,045. The bonds mature in 11.5 years. The coupon rate is ________%, the current yield is ________%, and the yield to maturity is ________%. A. 9.00; 8.61; 8.38 B. 9.00; 8.59; 8.33 C.9.00; 8.72; 8.64 D. 9.50; 8.87; 8.73
What is the current yield of a $1,000 par value bond that is currently selling for...
What is the current yield of a $1,000 par value bond that is currently selling for $1,362 if the annual coupon rate is 6.8% and the bond has 14 years to maturity?
A $1,000 par value bond, has an annual coupon rate of 6 percent, an annual yield...
A $1,000 par value bond, has an annual coupon rate of 6 percent, an annual yield to maturity of 7.5 percent, and 10 years until maturity. Assuming semi-annual coupon payments: d.         If the bond were selling for $929, what would the effective yield-to-maturity if you reinvest coupon payments at 9 percent? ***please show the work or what is entered in calculator***
What is the yield to maturity on a $1,000 par value bond 9 ⅛ percent Intercontinental...
What is the yield to maturity on a $1,000 par value bond 9 ⅛ percent Intercontinental Hotels Group bond if the investor buys the bonds at the following market prices? Assume the coupon is paid annually and the bond matures in 6 years. a.$1,125.00 b.$1,000 c.$962.00
An 8% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 8.2287%.
An 8% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 8.2287%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places.
Suppose a 10-year, 10 percent, semiannual coupon bond with a par value of $1,000 is currently...
Suppose a 10-year, 10 percent, semiannual coupon bond with a par value of $1,000 is currently selling for $1,135.90, producing a nominal yield to maturity of 8 percent. However, the bond can be called after 5 years for a price of $1,050. a. What is the bond's nominal yield to call (YTC)? b. If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why
A semiannual payment bond with a $1,000 par has a 7 percent quoted coupon rate, a...
A semiannual payment bond with a $1,000 par has a 7 percent quoted coupon rate, a 7 percent promised YTM, and 10 years to maturity. Find the bond's duration.
A semiannual payment bond with a $1,000 par has a 7 percent quoted coupon rate, a...
A semiannual payment bond with a $1,000 par has a 7 percent quoted coupon rate, a 7 percent promised YTM, and 10 years to maturity. Find the bond's duration. please show in excel
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT