Western Digital has issued a bond with a par value of $1,000 each and a 5.25%...
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Western Digital has issued a bond with a par value of $1,000 each and a 5.25% per year coupon. The bonds mature in 8 years and pay interest annually. What is the current value of the bond if the market interest rate is 6.0%? Q2. Find the present value of a 5-year zero-coupon bond with a $2,000 par value. Assume the annual market interest rate is 10%. Q3. A $1,000 face value bond has a 12.0% coupon and pays interest annually. The bond matures in 4 years, and the annual market interest is 3%. What is the Macaulay duration? Western Digital has issued a bond with a par value of $1,000 each and a 5.25% per year coupon. The bonds mature in 8 years and pay interest annually. What is the current value of the bond if the market interest rate is 6.0%? Q2. Find the present value of a 5-year zero-coupon bond with a $2,000 par value. Assume the annual market interest rate is 10%. Q3. A $1,000 face value bond has a 12.0% coupon and pays interest annually. The bond matures in 4 years, and the annual market interest is 3%. What is the Macaulay duration?
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Answer rating: 100% (QA)
SOLUTION Q1 To calculate the current value of the bond we need to discount the future cash flows the ... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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