A bond that matures in 13 years has a $1,000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?
a) Value of this bond if interest is paid interest annually:-
=PV(rate,nper,pmt,fv)
=PV(16%,13,8%*1000,1000)
=572.61
b) Value of this bond if interest is paid interest semi-annually:-
=PV(16%/2,13*2,8%/2*1000,1000)
=567.60
A bond that matures in 13 years has a $1,000 par value. The annual coupon interest...
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A bond that matures in 13 years has a $1000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity on a comparable-risk bond is 12 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? a. The value of this bond if it paid interest annually would be $ nothing. (Round to the nearest...
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