A bond with 14 years to maturity and a coupon rate of 7% has a par, or face, value of $22,000....
A bond with 14 years to maturity and a coupon rate of 7% has a par, or face, value of $22,000. Interest is paid annually. If you require a return of 11% on this bond, what is the price of the bond? (Round to the nearest cent.)
Homework Answers
Using formula for annual payments,
BP= C * (( 1 - ( 1 + r )^(-t) ) / r ) + F / ( 1 + r )^t
where, BP = Bond Price
r = rate of interest
C = Coupon Price
t = time in years
here,
r = 11% = 0.11
time = t = 14
F = face value = $22000
C = 7% of Face value = 7 * 220 = $1540
BP= 1540 * (( 1 - ( 1 + 0.11 )^(-14) ) / 0.11 ) + 22000 / ( 1 + 0.11 )^14 = 10752.072453 + 5103.886 = $15855.958
Hence, the bond price is $15855.958
Add Answer to:
A bond with 14 years to maturity and a coupon rate of 7% has a par, or face, value of $22,000....
A bond with 12 years to maturity and a coupon rate of 15% has a par,...
A bond with 12 years to maturity and a coupon rate of 15% has a par, or face, value of $18,000. Interest is paid annually. If you require a return of 16% on this bond, what is the price of the bond? The value of the bond is $ 17.064.52. (Round to the nearest cent)
Question Help A bond with 5 years to maturity and a coupon rate of 11% has...
Question Help A bond with 5 years to maturity and a coupon rate of 11% has a par, or face, value of $ 21,000. Interest is paid annually. If you require a return of 9% on this bond, what is the price of the bond? The value of the bond is $ nothing . (Round to the nearest cent.)
(Bond valuation) Calculate the value of a bond that will mature in 17 years and has...
(Bond valuation) Calculate the value of a bond that will mature in 17 years and has a $1,000 face value. The annual coupon interest rate is 11 percent, and the investor's required rate of return is 14 percent The value of the bond is S828.27 (Round to the nearest cent. (Bond valuation) Calculate the value of a bond that will mature in 14 years and has a $1.000 face value. The annual coupon interest rate is 5 percent, and the...
Bond X is noncallable and has 20 years to maturity, a 11% annual coupon, and a...
Bond X is noncallable and has 20 years to maturity, a 11% annual coupon, and a $1,000 par value. Your required return on Bond X is 11%; and if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5, years the yield to maturity on a 15-year bond with similar risk will be 12%. How much should you be willing to pay for Bond X today? (Hint: You will need...
7. An IBM bond has 11 years until maturity, a coupon rate of 8%, a par...
7. An IBM bond has 11 years until maturity, a coupon rate of 8%, a par value of $1,000 and sells for $1,150 a. If coupon payments are made semi-annually, what is the yield to maturity for the bond? b. What is the coupon yield on the bond? C. If you sell it after 1 year and interest rates have increased to 7.5%, what return do you earn?
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...
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.)
A bond that matures in 13 years has a $1000 par value. The annual coupon interest...
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...
BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual...
BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual coupon rate and a 10-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.3%. If Janet sold the bond today for $1,026.98, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places. % BOND VALUATION Madsen Motors's bonds have 12 years remaining to...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.9%, and sells for $1,110. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 9.1% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 7.5%, and sells for $1,150. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 10.5% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...
A bond with 12 years to maturity and a coupon rate of 15% has a par, or face, value of $18,000. Interest is paid annually. If you require a return of 16% on this bond, what is the price of the bond? The value of the bond is $ 17.064.52. (Round to the nearest cent)
(Bond valuation) Calculate the value of a bond that will mature in 17 years and has a $1,000 face value. The annual coupon interest rate is 11 percent, and the investor's required rate of return is 14 percent The value of the bond is S828.27 (Round to the nearest cent. (Bond valuation) Calculate the value of a bond that will mature in 14 years and has a $1.000 face value. The annual coupon interest rate is 5 percent, and the...
7. An IBM bond has 11 years until maturity, a coupon rate of 8%, a par value of $1,000 and sells for $1,150 a. If coupon payments are made semi-annually, what is the yield to maturity for the bond? b. What is the coupon yield on the bond? C. If you sell it after 1 year and interest rates have increased to 7.5%, what return do you earn?
BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual coupon rate and a 10-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.3%. If Janet sold the bond today for $1,026.98, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places. % BOND VALUATION Madsen Motors's bonds have 12 years remaining to...
Most questions answered within 3 hours.
-
A shotputter throws the shot with an initial speed of 15.8 m/s
at a 38.0 ∘...
asked 11 seconds ago -
Debra and Merina sell electronic equipment and supplies through
their partnership. They wish to expand their...
asked 52 seconds ago -
How does a linear regression allow you to better estimate
trends, costs, and other factors in...
asked 8 minutes ago -
1. (15%) Describe the difference between a pull (Kanban), push
and CONWIP production systems.
asked 5 minutes ago -
QUESTION 5
The total area under the Z distribution curve is equal to:
a.
10
b....
asked 14 minutes ago -
Using Python
The variables x and y refer to numbers. Write a code segment
that prompts...
asked 28 minutes ago -
If
the coefficient of static friction between a box and the floor is
0.35 with what...
asked 30 minutes ago -
A die is designed to punch holes with a radius of 1.08 10-2 m in
a...
asked 35 minutes ago -
government can increase import through
a. export subsidies
b. tax breaks
c. increase import tax
d....
asked 35 minutes ago -
Draw the following in the proper skeletal structure or line
angle formula.
5,6,6-tribromo-3,8-dicyclopropyl-7-isopentyldodecane
asked 41 minutes ago -
Two blocks of masses m1 and m2 hang at the ends of a string that
passes...
asked 41 minutes ago -
Linear programming is an excellent technique yet is not applied
nearly enough in the “real world.”...
asked 50 minutes ago