Question
In: Finance
Now the bond has a yield to maturity of 14.94 percent, compounded semi-annually. What is the current price of the bond?
25 years ago, Mini Max Inc. issued 30 year to maturity zero-coupon bonds with a par value of $1,000. Now the bond has a yield to maturity of 14.94 percent, compounded semi-annually. What is the current price of the bond? Round the answer to two decimal places.
Solutions
Expert Solution
We will use the PV function of excel to find the current price of the zero-coupon bond. Years to maturity remaining 30-25=5 years
Rate=14.94%/2, Nper=5*2=10,Pmt=0 (since there is no periodic payment because it is zero coupon bond),FV=-$1000
Therefore, the current price of the zero-coupon bond is $486.55.
jeff jeffy answered 2 years agoRelated Solutions
Bond Coupon Rate Maturity Price Per $100 Face Value Yield to Maturity- annual rate, compounded semi-annually...
Bond
Coupon Rate
Maturity
Price Per $100 Face Value
Yield to Maturity- annual rate, compounded
semi-annually
Vermeero
4%
5 years
???
6.00%
Renwaro
0%
5.5 years
74.1993
????
a) Draw a diagram showing the cash flow for each of the
bonds
b) Calculate the price of the Vermeero bond
c) Calculate the yield to maturity for the Renwaro bond
d) Suppose you purchase the Renwaro bond today. You plan to sell
this bond one year from now, and you forecast...
Bond Coupon Rate Maturity Price Per $100 Face Value Yield to Maturity- annual rate, compounded semi-annually...
Bond
Coupon Rate
Maturity
Price Per $100 Face Value
Yield to Maturity- annual rate, compounded
semi-annually
Vermeero Enterprises
4%
5 years
???
6.00%
Renwaro Company
0%
5.5 years
74.1993
????
a) Draw a diagram showing the cash flow for each of the
bonds
b) Calculate the price of the Vermeero bond
c) Calculate the yield to maturity for the Renwaro bond
d) Suppose you purchase the Renwaro bond today. You plan to sell
this bond one year from now, and...
What is the yield to maturity on an 9-year, 9-percent bond that pays interest semi-annually, which...
What is the yield to maturity on an 9-year, 9-percent bond that
pays interest semi-annually, which is now priced at $979? Use a
financial calculator.
4.68 percent
9.35 percent
9.02 percent
9 percent
A fixed coupon bond has 10 years to maturity with payments made semi-annually. The current price...
A fixed coupon bond has 10 years to maturity with payments made
semi-annually. The current price of the bond is $1100. Compute the
yield-to-maturity for coupon rates of 0% to 10% in 1%
increments.
A $4,000 bond with a 3% coupon compounded semi-annually is currently priced to yield 8% with...
A $4,000 bond with a 3% coupon compounded semi-annually is
currently priced to yield 8% with 19 years remaining to maturity.
What is the yield to maturity five years from now if the bond price
rises $225 at that time?
What is the yield to maturity on a bond that has a price of $2,824 and...
What is the yield to
maturity on a bond that has a price of $2,824 and pays $107
annually forever?
Please round your
answer to the fourth decimal. E.g. 0.1234
What is the yield to maturity on a bond that has a price of$1,700 and...
What is the yield to maturity on a bond that has a price of
$1,700 and a coupon rate of 12% annually for 6 years at the end of
which it repays the principal of $1000? Is the bond selling at
premium, at par, or at discount? How can you tell? (Using financial
calculator)
A 30-year 6.000% semi-annual coupon bond has a tenor of 13 years and a yield to maturity of 7.500%. In percent of PAR, what is the price of the bond today?
A 30-year 6.000% semi-annual coupon bond has a tenor of 13 years and a yield to maturity of 7.500%. In percent of PAR, what is the price of the bond today?
12. A corporate bond offers 9% coupon rate, compounded semi-annually. The maturity left is 7 years....
12.
A corporate bond offers 9% coupon rate, compounded
semi-annually. The maturity left is 7 years. The yield to maturity
for bonds with such risks is 10%.
Which one of the following statements is correct?
each coupon payment paid out is $50 per share
10% is the interest rate you use as discount rate to find bond
value
each coupon payment paid out is $45 per share
number of total coupon payments till maturity is 7
multiple choice. only 1...
If the yield to maturity changes to 12 percent, what should be the percentage price change of the bond?
A bond has a duration of seven years and a yield to maturity of
7.5 percent. If the yield to maturity changes to 12 percent, what
should be the percentage price change of the bond?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 3) You are rolling a 12 sided die 8 times. a) What is the size for...
- explain the difference between quantitative and qualitative research strategies. Provide an example of a crime based...
- use postorder and inorder tree traversals to make preorder traversal. #!/usr/bin/env python3 # encoding: UTF-8 """Turning...
- 1. Write an if-else statement to describe an object. Print "Balloon" if isBalloon is true and...
- An investor is considering purchasing a Treasury bond with a 20 year maturity, an 8% coupon...
- Write a program that copies the contents of one file to a destination file. This program...
- how to conduct a marketing mix for 3d crest white strips
ADVERTISEMENT