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(Bond valuation) Calculate the value of a bond that will mature in 17 years and has a $1,000 face value. The annual coupon in(Bond valuation) Calculate the value of a bond that will mature in 14 years and has a $1.000 face value. The annual coupon in(Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with an annual coupon rate of 6 pProblem 7-8 (similar to) Question Help (Bond valuation) ExxonMobil 16-year bonds pay 11 percent interest annually on a $1,000Problem 7-12 (similar to) Question Help (Bond valuation zero coupon) The Latham Corporation is planning on issuing bonds that(Bond valuation) Xerox issued bonds that pay $67.50 in interest each year and will mature in 5 years. You are thinking aboutBookmatch 7-19 (book/static) Question Help (Expected rate of return and current yield) Time Warner has bonds that are sellingBookmatch 7-20 (book/static) Question Help (Expected rate of return and current yield) Citigroup issued bonds that pay a coup

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Answer #1

Answer to Question 1:

Face Value = $1,000

Annual Coupon Rate = 11.00%
Annual Coupon = 11.00% * $1,000
Annual Coupon = $110

Time to Maturity = 17 years
Annual Required Return = 14%

Value of Bond = $110 * PVIFA(14%, 17) + $1,000 * PVIF(14%, 17)
Value of Bond = $110 * (1 - (1/1.14)^17) / 0.14 + $1,000 / 1.14^17
Value of Bond = $110 * 6.37286 + $1,000 * 0.10780
Value of Bond = $808.81

Answer to Question 2:

Face Value = $1,000

Annual Coupon Rate = 5%
Annual Coupon = 5.00% * $1,000
Annual Coupon = $50

Time to Maturity = 14 years
Annual Required Return = 7%

Value of Bond = $50 * PVIFA(7%, 14) + $1,000 * PVIF(7%, 14)
Value of Bond = $50 * (1 - (1/1.07)^14) / 0.07 + $1,000 / 1.07^14
Value of Bond = $50 * 8.74547 + $1,000 * 0.38782
Value of Bond = $825.09

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