What is the value of a bond that has a par value of $1,000, a coupon rate of 9.75 percent (paid annually), and that matures in 22 years? Assume a required rate of return on this bond is 12.84 percent
Annual coupon=$1000*9.75%=$97.5
Hence value of bond=Annual coupon*Present value of annuity factor(12.84%,22)+$1000*Present value of discounting factor(12.84%,22)
=$97.5*7.242093309+$1000*0.070115219
=$776.22(Approx).
NOTE:
1.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=$97.5[1-(1.1284)^-22]/0.1284
=$97.5*7.242093309
2.Present value of discounting factor=$1000/1.1284^22
=$1000*0.070115219
What is the value of a bond that has a par value of $1,000, a coupon...
What is the value of a bond that has a par value of $1,000, a coupon rate of 10.71 percent (paid annually), and that matures in 23 years? Assume a required rate of return on this bond is 10.04 percent. Round the answer to two decimal places.
A bond that matures in 13 years has a $1,000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 16 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?
A bond that matures in 13 years has a $1,000 par value. The annual coupon interest rate is 7 percent and the markets 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?
(Bond valuation) A bond that matures in 19 years has a $1,000 par value. The annual coupon interest rate is 14 percent and the market's required yield to maturity on a comparable-risk bond is 13 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? a. The value of this bond if it paid interest annually would be $ nothing. (Round to the...
A bond that matures in 12 years has a $1,000 par value. The annual coupon interest rate is 11 percent and the market's required yield to maturity on a comparable-risk bond is 17 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_____? a. The value of this bond if it paid interest annually would be $nothingm. (Round to the nearest cent.)
1. A bond has a par value of $1,000, a current yield of 8.15 percent, and semiannual coupon payments. The bond is quoted at 103.51. What is the coupon rate of the bond?2. Kasey Corp. has a bond outstanding with a coupon rate of 5.94 percent and semiannual payments. The bond has a yield to maturity of 5.1 percent, a par value of $2,000, and matures in 20 years. What is the quoted price of the bond?3. A bond with...
A bond that matures in 13 years has a $1000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity on a comparable-risk bond is 12 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? a. The value of this bond if it paid interest annually would be $ nothing. (Round to the nearest...
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?
A bond that matures in 17 years has a $1 000 par value. The annual coupon interest rate is 14 percent and the market's required yield to maturity on a comparable-risk bond is 17 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? _______
A bond that matures in 17 years has a $1000 par value. The annual coupon interest rate is 15 percent and the market's required yield to maturity on a comparable-risk bond is 14 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? Question 7-3