Suppose you structured a bond deal for Kanye West that paid him $20 million upfront, with future royalties and streaming revenues from his past albums going towards payments to bondholders. Each bond had a face value of $1,000 and a coupon rate of 7.7% with semi-annual coupons. If the bonds have 9 years remaining until maturity and the current yield to maturity is 9.7%, what price is each bond trading at right now? Round to the nearest cent.
Now, for this question,
M = $1000, n = 9 * 2 = 18 semi-annual periods, C = 7.7% * $1000/2 = $38.5 (semi-annually), i = 9.7%/2 = 4.85% (semi-annually)
P = $455.37 + $$426.35
P = $881.7 ----> Answer
Suppose you structured a bond deal for Kanye West that paid him $20 million upfront, with...
Suppose you structured a bond deal for Kanye West that paid him $20 million upfront, with future royalties and streaming revenues from his past albums going towards payments to bondholders. Each bond had a face value of $1,000 and a coupon rate of 6.6% with semi-annual coupons. If the bonds have 12 years remaining until maturity and the current yield to maturity is 8.6%, what price is each bond trading at right now? Round to the nearest cent.
Question 7 Homework. Unanswered Suppose you structured a bond deal for Kanye West that paid him $20 million upfront, with future royalties and streaming revenues from his past albums going towards payments to bondholders. Each bond had a face value of $1,000 and a coupon rate of 7.7% with semi-annual coupons. If the bonds have 9 years remaining until maturity and the current yield to maturity is 9.7%, how much is the bond worth? Round to the nearest cent. Numeric...