company y issues $1 million face value bond that matures in 3 years. the bond has...

company y issues $1 million face value bond that matures in 3 years. the bond has a coupon rate of 6%. the required rate of return is 6% (compounded) semiannually). Calculate the following; (a) the price of the bond today (b) the price elasticity of the bond, assuming that the required rate of return decreases 7.5%. is the elasticity higher or lower when the bond has a lower coupon rate? (c) the modified duration of the bond. use it to estimate the change in the bond price when the required rate of return decreases by 0.5%.

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Go through it, Any doubts, please feel free to ask, Give positive feedback, Thank you

jeff jeffy answered 1 year ago

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