Homework Answers
Annual Interest Rate is nothing but Coupon Rate.Coupon rate is the percentage that a bond pays as interest.
Yield given here is the Current Yiled which = Interest paid by bond / Current Market Price.
Annual Interest payments for respective bonds are as hereunder :
| FV | Coupon | Interest |
| 1000 | 1.38% | 13.80 |
| 1000 | 0.10% | 1.00 |
| 1000 | 1.65% | 16.50 |
| 1000 | 1.25% | 12.50 |
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How do you calculate the Annual Interest Rate
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thank you. INTT 204 ASSIGNMENT Q1) What is the price of an annual coupon bond with...
thank you.
INTT 204 ASSIGNMENT Q1) What is the price of an annual coupon bond with a coupon rate of 10%, $1,000 face value, and 50 years to maturity, if its yield to maturity is 12%? ($833.91) I Q2) Company X is expected to pay an end-of-year dividend of $10 a share. After the dividend its stock is expected to sell at $110. If the market capitalization rate is 10%, what is the current stock price? (Ans. $109.09) Q3) Consider...
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thank you.
INTT 204 ASSIGNMENT Q1) What is the price of an annual coupon bond with a coupon rate of 10%, $1,000 face value, and 50 years to maturity, if its yield to maturity is 12%? ($833.91) I Q2) Company X is expected to pay an end-of-year dividend of $10 a share. After the dividend its stock is expected to sell at $110. If the market capitalization rate is 10%, what is the current stock price? (Ans. $109.09) Q3) Consider...
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