Assume that coupon interest payments are made semiannually and that par value is $1,000 for both...

Question

Question

Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Coupon rate Time to m

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Bond A Bond B Bond A Bond B a. $905.26 $733.33 a. =-PV(7.03%/2,5*2,4.75%/2*1000, 1000) =-PV(7.03%/2,25*2,4.75%/2*1000, 1000)

Add a comment

Answer 2

Similar Homework Help Questions

Assume that coupon interest payments are made semiannually and that par value is $1,000 for both...

Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Coupon rate Time to maturity Required return Bond A 4.50% 5 years 7.038 Bond B 4.508 25 years 7.03% a. Calculate the values of Bond A and Bond B. (Round your answers to 2 decimal places.) Bond value A Bond value B b. Recalculate the bonds' values if the required rate of return changes to 8.72%. (Round your answers to 2 decimal places.)...
A $1,000 par value bond with five years left to maturity pays an interest payment semiannually...

A $1,000 par value bond with five years left to maturity pays an interest payment semiannually with a 4 percent coupon rate and is priced to have a 3.6 percent yield to maturity. If interest rates surprisingly increase by 0.5 percent, by how much would the bond’s price change? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Bond's price (Click to select)decreasedincreased by $ . r
A 8.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 10 years remaining...

A 8.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915. value: 25.00 points Calculate the yield to maturity on the following bonds. a. A 8.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per...

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have...

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 8 years remaining to maturity, and have a required rate of return of 13 percent. a. The bond has a 8.4 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) b. The bond has a 10.4 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal...
Calculate the fair present values of the following bonds, all of which pay interest semiannually, have...

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 10 years remaining to maturity, and have a required rate of return of 10 percent. a. The bond has a 5 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) b. The bond has a 7 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal...
A 20-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate...

A 20-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 8%. a. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $950. (Round your intermediate calculations to 4 decimal places. Round your answers to 2 decimal places.) Bond equivalent yield to maturity Effective annual yield to maturity b. Find the bond equivalent and effective annual yield to maturity of the bond if the bond...

Determine the interest payment for the following three bonds (Assume a $1,000 par value.) (Leave no...

Determine the interest payment for the following three bonds (Assume a $1,000 par value.) (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places): $ 4.25 percent coupon corporate bond (paid semiannually) 4.90 percent coupon Treasury note Corporate zero coupon bond maturing in 15 years $ $
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your...

Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 4.75 percent coupon corporate bond (paid semiannally) __________ 5.40 percent coupon treasury note _______ Corporate zero-coupon bond maturing in ten years ______
Problem 14-14 Consider a bond with par value = $1,000) paying a coupon rate of 5%...

Problem 14-14 Consider a bond with par value = $1,000) paying a coupon rate of 5% per year semiannually when the market interest rate is only 4% per half-year. The bond has three years until maturity a. Find the bond's price today and six months from now after the next coupon is paid. (Round your answers to 2 decimal places.) Current price Price after six months b. What is the total (six-month) rate of return on the bond? (Do not...

Yield to maturity. What is the yield of each of the following bonds if interest (coupon) is paid semiannually? a. W...

Yield to maturity. What is the yield of each of the following bonds if interest (coupon) is paid semiannually? a. What is the yield of the following bond interest (coupon) is paid semiannually? (Round to two decimal places.) Par Value $5,000.00 Coupon Rate 7% Years to Maturity 20 Yield to Maturity Price $4900.00 0 Data Table (Click on the following on in order to copy its contents into a spreadsheet.) Par Value Coupon Rate Years to Maturity Yield to Maturity...

Assume that coupon interest payments are made semiannually and that par value is $1,000 for both...

Homework Answers