3. A 20-year 1000 par value bond with 7% annual coupons can be called by the...
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3. A 20-year 1000 par value bond with 7% annual coupons can be called by the issuer at par on any coupon date immediately after the coupon has been paid, starting with the 8th coupon date. Sandy wants to buy this bond at a price of X that will guarantee that she will earn a yield rate of 5% or more. Determine X. 3. A 20-year 1000 par value bond with 7% annual coupons can be called by the issuer at par on any coupon date immediately after the coupon has been paid, starting with the 8th coupon date. Sandy wants to buy this bond at a price of X that will guarantee that she will earn a yield rate of 5% or more. Determine X.
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Answer rating: 100% (QA)
To determine the price X at which Sandy should buy the bond to earn a yield rate of 5 or more we need to calculate the present value of the bonds futu... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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