Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 9 years to maturity, and a coupon rate of 6 percent paid annually. If the yield to maturity is 10 percent, what is the current price of the bond?

Solutions

Expert Solution

Price of the bond = PV of the coupon payments + PV of the par value

Price of the bond = €60({1 – [1 / (1 + 0.10)^9]} / 0.10) + €1,000[1 / (1 + 0.10)^9]

Price of the bond = €769.64

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 14 years to maturity, and a coupon rate of 8 percent paid annuallly. If the yield to maturity is 11 percent, what is the current price of the bond? Multiple Choice €830.07 €1,030.00 $751.02 €1,251.33 €790.54

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 20 years to maturity, and a coupon rate of 6.2 percent paid annually. If the yield to maturity is 7.3 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 15 years to maturity, and a coupon rate of 6.1 percent paid annually. If the yield to maturity is 7.2 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 6 years to maturity, and a coupon rate of 6 percent paid annuallly. If the yield to maturity is 10 percent, what is the current price of the bond? rev: 02_28_2019_QC_CS-161195 Multiple Choice $784.50 €1,200.69 €867.08 €825.79 €1,030.00

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of? 1000, 25 years to maturity, and a coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond? If the yield to maturity is 8.2 percent, what is the current price of the bond? (Do...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 25 years to maturity, and a coupon rate of 7.1 percent paid annually. If the yield to maturity is 8.2 percent, what is the current price of the bond?

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 10 years to maturity, and a coupon rate of 6.8 percent paid annually. If the yield to maturity is 7.9 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) A Japanese...

1. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued...

1. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 9 years to maturity, and a coupon rate of 8 percent paid annuallly. If the yield to maturity is 10 percent, what is the current price of the bond? €1,030.00 €1,128.94 $840.58 €929.06 €884.82 2. Gabriele Enterprises has bonds on the market making annual payments,...

Bonds issued in the Philippines, make a coupon payments twice ayear. So, if an ordinary...

Bonds issued in the Philippines, make a coupon payments twice a year. So, if an ordinary bond has a coupon rate of 14%, then the owner will get a total of P140 a year, but this P140 will come in two payments of P70. Suppose we are examining such a bond with a face value P1,000. The yield to maturity is quoted at 16%. Bond yields are quoted like APR’s; the quoted rate is equal to the actual rate per period...

MicroDrive has issued bonds that have a 6% coupon rate, payable semiannually. The bonds mature in...

MicroDrive has issued bonds that have a 6% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 5%. What is the current price of the bonds?

Subjects