What is the most we should pay for a bond with a par value of $1000,...

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What is the most we should pay for a bond with a par value of $1000,...

What is the most we should pay for a bond with a par value of $1000, coupon rate of 5.2% paid semi-annually, and a remaining life of 18 years? The bond is rated BBB, with a yield to maturity of 5.9%. (Round your answer to the nearest penny.)

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Answer 1

Answer #1

2 face value = 1000 Coupon = 5,2%X 1000 = 26 Time = 18x2= 36 periods ytm = 5.9% = 2.95% Using financial calculator, fu=1000 p

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Answer 2

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