Question
In: Finance
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 not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
______price?
Solutions
Expert Solution
1. Information provided:
Par value= future value= $1,000
Time= 25 years
Coupon rate= 6.4%
Coupon payment= 0.064*1,000= $64
Yield to maturity= 7.5%
The current price of the bond is calculated by computing the present value.
Enter the below in a financial calculator to compute the present value:
FV= 1,000
N= 25
PMT= 64
I/Y= 7.5
Press the CPT key and PV to compute the present value.
The value obtained is 877.38.
Therefore, the current price of the bond is $877.38.
2. Information provided:
Par value= future value= $1,000
Time= 25 years
Coupon rate= 6.4%
Coupon payment= 0.064*1,000= $64
Yield to maturity= 8.2%
The current price of the bond is calculated by computing the present value.
Enter the below in a financial calculator to compute the present value:
FV= 1,000
N= 25
PMT= 64
I/Y= 8.2
Press the CPT key and PV to compute the present value.
The value obtained is 811.09
Therefore, the current price of the bond is $811.09.
In case of any query, kindly comment on the solution.
jeff jeffy answered 1 year agoRelated Solutions
Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...
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Multiple Choice
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Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...
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rev: 02_28_2019_QC_CS-161195
Multiple Choice
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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
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a par value of €1,000, 10 years to maturity, and a coupon rate of
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If the yield to maturity is 7.9 percent, what is the current
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and round your answer to 2 decimal places, e.g.,
32.16.)
A Japanese...
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? (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, 14 years to maturity, and a coupon rate of 7
percent paid annually. If the yield to maturity is 11 percent, what
is the current price of the bond?
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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?
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2. Gabriele Enterprises has bonds on the market making annual
payments,...
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