Using caclulator TVM functions:
The inputs shall be:
N | 15 |
I/Y | 11% |
FV | 1,000.00 |
PMT | 140 |
CPT PV= $1,215.73
At 12 years:
N | 12 |
I/Y | 11% |
FV | 1,000.00 |
PMT | 140 |
CPT PV | $ 1,194.77 |
At 9 years:
N | 9 |
I/Y | 11% |
FV | 1,000.00 |
PMT | 140 |
CPT PV | $ 1,166.11 |
At 6 years:
N | 6 |
I/Y | 11% |
FV | 1,000.00 |
PMT | 140 |
CPT PV | $ 1,126.92 |
At 1 year:
N | 1 |
I/Y | 11% |
FV | 1,000.00 |
PMT | 140 |
CPT PV | $ 1,027.03 |
A bond which has coupon rate higher than the yield shall be sold at premium . However as it approaches maturity, the price would decrease to par value. In the graph we can see that as the time to maturity decreases graph moves towards $1,000
Pecos Manufacturing has just issued a 15 year, 14% coupon interest rate, 1000-par bond that pays...
Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1000-par bond that pays interest annually.The required return is currently 13%, and the company is certain it will remain at 13% until the bond matures in 15 years. a.Assuming that the required return does remain at 13% until maturity, find the value of the bond with (1) 15 years, (2) 12 years, (3) 9 years, (4) 6 years, (5) 3 years, (6) 1 year to maturity. b.All else remaining...
A coupon bond that pays interest annually has a par value of $1000, matures in 11 years, and has a yield to maturity of 3%. If the coupon rate is 7%, the intrinsic value of the bond today will be
A coupon bond that pays interest annually has a par value of $1000, matures in 11 years, and has a yield to maturity of 3%. If the coupon rate is 7%, the intrinsic value of the bond today will be
A coupon bond that pays interest semiannually has a par value of $1000, matures in 9 years, and has a yield to maturity of 6%. If the coupon rate is 7%, the intrinsic value of the bond today will be
The Salem Company bond currently sells for $936.37has a coupon interest rate of 11% and a $1000 par value, pays interest annually, and has18 years to maturity. a. Calculate the yield to maturity (YTM) on this bond.
Consider a $1,000 par value bond with a 9% annual coupon. The bond pays interest annually. There are 20 years remaining until maturity. You have expectations that in 5 years the YTM on a 15-year bond with similar risk will be 10%. You plan to purchase the bond now and hold it for 5 years. Your required return on this bond is 9%. How much would you be willing to pay for this bond today? (hint: find the expected bond...
A $1,000 par bond that pays interest semiannually has a quoted coupon rate of 7%, a promised yield to maturity of 5.8% and exactly 11 years to maturity. The present value of the coupon stream represents ______ of the total bond's value. (How can this be computed a BA-II Plus calculator?) A.) 53.8% B.) 51.4% C.) 50.3% D.) 52.5%
The bond shown in the following table pays interest annually. Par value Coupon interest rate Years to maturity Current value $100 8% 6 $80 Calculate the yield to maturity (YTM) for the bond.
A coupon bond that pays interest annually is selling at par value of $1000, matures in 5 years, and has a coupon rate of 9%. The maturity rate was calculated in Excel and is 9%. How to solve the maturity rate manually, with the detailed explanations?
A bond that matures in 15 years has a $1000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 15 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?