1. What is the price of a $1,000 par value bond given the following information: (Show...

1. What is the price of a $1,000 par value bond given the following information: (Show work)

Maturity:                     5 Years
Coupon Rate:             0% (semiannual)
YTM:                              3%

$1,563
$861
$784
$863

Expert Solution

Statement showing price of bond:
*( In case of semi annual bond, yield= 3/2=1.5%, Coupon rate=0%, Years=52=10**
Particulars	Time	PVf @1.5%	Amount	PV
Cash Flows (Interest)	1.00	0.9852	-	-
Cash Flows (Interest)	2.00	0.9707	-	-
Cash Flows (Interest)	3.00	0.9563	-	-
Cash Flows (Interest)	4.00	0.9422	-	-
Cash Flows (Interest)	5.00	0.9283	-	-
Cash Flows (Interest)	6.00	0.9145	-	-
Cash Flows (Interest)	7.00	0.9010	-	-
Cash Flows (Interest)	8.00	0.8877	-	-
Cash Flows (Interest)	9.00	0.8746	-	-
Cash Flows (Interest)	10.00	0.8617	-	-
Cash flows (Maturity Amount)	10.00	0.8617	1,000.00	861.70
Fair Price				861.70
So correc answer is B) $861

ekkarill92 answered 3 years ago

1. What is the value of a bond that has a par value of 1,000, a...

1. What is the value of a bond that has a par value of 1,000, a coupon rate of 7% (semi-annually), and matures in 10 years? Assume a required return of 5.5%. $1,114.20 $1,102.18 $1,087.62 $1,058.34 2. What is the yield-to-maturity of a 5.0% semi-annual coupon bond with a $1,000 par value, which matures in 3 years? Assume the current market price of the bond is $1,081.95. 1.08% 2.15% 2.16% 5.00%

Answer the following questions regarding bond valuation. What is the price of a $1,000 par value...

Answer the following questions regarding bond valuation. What is the price of a $1,000 par value bond with a 6% coupon rate paid semiannually, if the bond is priced to yield 4% and it has five years to maturity? Following a, what would be the price of the bond if the coupon is paid quarterly? Explain how the calculation changes, given semi-annual coupons in (a) versus quarterly coupons in (b).

1. What is the price of a $1,000 par value bond with an 8% coupon rate paid...

1. What is the price of a $1,000 par value bond with an 8% coupon rate paid annually, if the bond is priced to yield 8% and has 9 years to maturity? 2. What would be the price of the bond in #1 if the yield decreased to 6%? 3. What would be the price of the bond in #1 if the yield rose to 10% and was callable at 110% of par in 4 years? 4. What is the yield...

1. What is the price of a 1,000 par value semi-annual bond with 5.0 years to...

1. What is the price of a 1,000 par value semi-annual bond with 5.0 years to maturity and a coupon rate of 4.98% and a yield-to-maturity of 8.62% ?

The current price of a 10-year, $1,000 par value bond is $1,000. Interest on this bond...

The current price of a 10-year, $1,000 par value bond is $1,000. Interest on this bond is paid every six months, and the simple annual yield is 14 percent. Given these facts, what is the annual coupon rate on this bond? a. 10% b. 12% c. 14% d. 17% e. 21%

Calculate the following costs of capitals: a. A $1,000 par value bond with a market price...

Calculate the following costs of capitals: a. A $1,000 par value bond with a market price of $970 and a coupon interest rate of 11 percent. Flotation costs for a new issue would be approximately 6 percent. The bonds mature in 14 years and the corporate tax rate is 21 percent. b. A preferred stock selling for $106 with an annual dividend payment of $12. The flotation cost will be $5 per share. The company's marginal tax rate is 21...

What is the current price of a $1,000 par value bond maturing in 20 years with...

What is the current price of a $1,000 par value bond maturing in 20 years with a coupon rate of 8%, paid annually, that has a required return of 12%? Please include 2 decimal places

1. What is the price of a bond with the following features? Face Value = $1,000...

1. What is the price of a bond with the following features? Face Value = $1,000 Coupon Rate = 7% (stated as an ANNUAL rate) Semiannual coupon payments Maturity = 9 years YTM = 4.05% (Stated as an APR) State your answer to the nearest penny (e.g., 984.25) 2. You own a bond with the following features: Face value of $1000, Coupon rate of 3% (annual) 11 years to maturity. The bond is callable after 5 years...

Find the price of a bond. The time is today. The $1,000 par value corporate bond...

Find the price of a bond. The time is today. The $1,000 par value corporate bond you are interested in has a 5% coupon rate, paid semi-annually. The maturity of the bond is 20 years. The rating agencies have determined that this company should have a B+ rating, making its yield be 6%. Show a time line of these cash flows. What is the price you will have to pay for the bond? N I PV PMT FV

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%?

Question