Croft Inc, bonds have a par value of $1000. The bonds have a 4% coupon rate...
Croft Inc, bonds have a par value of $1000. The bonds have a 4% coupon rate and will mature in 10 years. Assume the bond is semi-annual.
A) calculate the price if the yield to maturity on the bonds is 7, 8 and 9 percent respectively.
B) Explain the impact on price if the required rate of return decreases.
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Croft Inc, bonds have a par value of $1000. The bonds have a 4%
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Please explain how this answer was determined using formulas or a financial calculator if applicable. Especially...
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a financial calculator if applicable. Especially part A.
Thanks!
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8. Croft Inc, bonds have a par value of $1,000. The bonds have a 4% coupon rate and will mature in 10 years. Assume the bond is semi-annual a. Calculate the price if the yield to maturity on the bonds is 7, 8, and 9 percent, respectively. b. Explain the impact on price if the required rate of return decreases. c. How does the relationship between the coupon rate and the yield to maturity determine how a bond's price will...
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Please explain how this answer was determined using formulas or
a financial calculator if applicable. Especially part A.
Thanks!
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