A 30-year bond has a face value of $100,000 and pays monthly dividends at a coupon...

A 30-year bond has a face value of $100,000 and pays monthly dividends at a coupon rate of 6%. If an investor wants a rate of return of at least 8% per year, compounded monthly, what should be the maximum price paid for the bond? Round your answer to the nearest dollar. Enter only numerals, i.e., do not enter a dollar sign, decimal point, comma(s), etc.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

A 16-year, 4.5 percent coupon bond pays interest annually. The bond has a face value of...

A 16-year, 4.5 percent coupon bond pays interest annually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent? a. 0.21% increase b. 2.14% decrease c. $19.19 increase d. 1.97% increase

A bond with 30 years to maturity has a face value of $1,000. The bond pays...

A bond with 30 years to maturity has a face value of $1,000. The bond pays an 8 percent semiannual coupon, and the bond has a 7 percent nominal yield to maturity. What is the price of the bond today? DO NOT USE EXCEL

A 3-year $1000 face value bond pays an annual coupon of 8% and has a ytm...

A 3-year $1000 face value bond pays an annual coupon of 8% and has a ytm of 4%. What is this bond's price? What is this bond's duration?

A 30-year corporate bond has a face value of $1,000 and a coupon rate of 6%...

A 30-year corporate bond has a face value of $1,000 and a coupon rate of 6% paid annually. At the end of year 12 the Yield to Maturity is 8%. a. How much money will the holder of the bond receive at the end of year 30? b. What is the bond’s price at the end of year 12? c. What will the bond’s interest payment be at the end of year 12? d. If the Yield to Maturity later...

A 5-year bond with a face value of $1,000 pays a coupon of 4% per year...

A 5-year bond with a face value of $1,000 pays a coupon of 4% per year (2% of face value every six months). The reported yield to maturity is 3% per year (a six-month discount rate of 3/2 =1.5%). What is the present value of the bond?

Consider a 10-year bond with a face value of $100 that pays an annual coupon of...

Consider a 10-year bond with a face value of $100 that pays an annual coupon of 8%. Assume spot rates are flat at 5%. a.Find the bond’s price and modified duration. b.Suppose that its yields increase by 10bps. Calculate the change in the bond’s price using your bond pricing formula and then using the duration approximation. How big is the difference? c.Suppose now that its yields increase by 200bps. Repeat your calculations for part b.

What is the value of a 9-year, 7.2% coupon, $1,000 face value bond that pays quarterly...

What is the value of a 9-year, 7.2% coupon, $1,000 face value bond that pays quarterly coupons, if its yield to maturity is 3.9%? Round to the nearest cent.

Consider a 12-year bond with face value $1,000 that pays an 8.6% coupon semi-annually and has...

Consider a 12-year bond with face value $1,000 that pays an 8.6% coupon semi-annually and has a yield-to-maturity of 7.7%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to decrease by 0.60% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?) please (i) Describe and interpret the...

Consider a 7-year bond with face value $1,000 that pays an 8.4% coupon semi-annually and has...

Consider a 7-year bond with face value $1,000 that pays an 8.4% coupon semi-annually and has a yield-to-maturity of 6.9%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to increase by 0.40% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?) Can you please explain with FV,...

2(A) A 10-year bond has a face value of EUR1000 pays a 6% annual coupon rate....

2(A) A 10-year bond has a face value of EUR1000 pays a 6% annual coupon rate. The required market yield is 6.5%. What is its convexity? 2(B) A 10-year bond has a face value of EUR1000 pays a 6% annual coupon rate and is traded at 102%. The market yield is 5.73%. What are its duration and convexity? If the required yield changes by +200 basis points, compare the actual bond price change with using duration and convexity rule to...

Subjects