Answered: What is the price of a $1,000 par…

What is the price of a $1,000 par value, semi-annual coupon bond with 13 years to maturity, a coupon rate of 6.66% and a yield-to-maturity of 5.37%?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

What is the price of a $1,000 par value, semi-annual coupon bond with 13 years to maturity, a coupon rate of 6.66% and a yield-to-maturity of 5.37%?

What is the price of a $1,000 par value, 19 year, annual coupon bond with a 6.79% coupon rate and a yield to maturity of 3.95%?

You bought a 22-year, 7.13% semi-annual coupon bond today and the current market rate of return is 3.79%. The bond is callable in 7 years with a $64 call premium. What price did you pay for your b

ond?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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