# Question: Assume a 1 000 face value bond has a coupon rate

Assume a $1,000 face value bond has a coupon rate of 8.5 percent paid semiannually and has an eight-year life. If investors are willing to accept a 10 percent rate of return on bonds of similar quality, what is the present value or worth of this bond?

## Answer to relevant Questions

a. By how much would the value of the bond in Problem 4 change if investors wanted an 8-percent rate of return? b. A bond with the same par value and coupon rate as the bond in Problem 4 has 14 years until maturity. If ...Koppen Corporation has two bond issues outstanding, each with a par value of $1,000. Information about each is listed below. Suppose market interest rates rise 1 percentage point across the yield curve. What will be the ...a. You own a two-bond portfolio. Each has a par value of $1000. Bond A matures in 5 years, has a coupon rate of 8 percent, and has a annual yield to maturity of 9.20 percent. Bond B matures in 15 years, has a coupon rate ...Mercier Corporation’s stock is selling for $95. It has just paid a dividend of $5 a share. The expected growth rate in dividends is 8 percent. a. What is the required rate of return on this stock? b. Using your answer to ...Discuss how investment bankers assume risk in the process of marketing securities of corporations. How do investment bankers try to minimize these risks?Post your question