You find a zero coupon bond with a par value of $10,000 and 24 years to maturity.
Question:
You find a zero coupon bond with a par value of $10,000 and 24 years to maturity. If the yield to maturity on this bond is 4.2 percent, what is the dollar price of the bond? Assume semiannual compounding periods.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 71% (7 reviews)
A zero coupon bond means does not pay any interest Price of the bond f...View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Question Posted:
Related Video
The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel
Students also viewed these Business questions
-
You find a zero coupon bond with a par value of $5,000 and 15 years to maturity. If the yield to maturity on this bond is 4.1 percent, what is the dollar price of the bond? Assume semiannual...
-
A 10-year, 12% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,060. The bond sells for $1,100. (Assume that the bond has just been issued.) a. What is...
-
A 20-year U.S. Treasury bond with a par value of $1,000 is currently selling for $1,025 from various securities dealers. The bond carries a 6 percent coupon rate with payments made annually. If...
-
If you wanted to double $1,000 in 10 years' time, what average rate of return would you require on your investment?
-
Calculate the standard free-energy change and the equilibrium constant Kp for the following reaction at 25 C. See Table 18.2 for data. CO(g) 3H2(g) CH4(g) H20(g)
-
Gateway, Inc., and Dell Computer Corporation assemble computers and sell them over the telephone or the Internet. Access the website of either of these companies. Become familiar with the products of...
-
Arco, Inc. is a small company that installs and repairs home and commercial heating and air-conditioning units. It has 75 employees and recently started selling its stock to extended family, its...
-
Kronecker Company, a growing mail-order clothing and accessory company, is concerned about its growing MSDA expenses. It therefore examined its customer ordering patterns for the past year and...
-
Step 3: Testing Your Configuration Update 1. Restart the SSH service. [Your solution command here] 2. Exit the root account. [Your solution command here] 3. SSH to the target machine using your sysd...
-
1. Jim Adams posts the column totals and individual transactions in "Other" columns to the appropriate general ledger account and updates each general ledger account balance. He places a posting...
-
Draiman Corporation has bonds on the market with 14.5 years to maturity, a YTM of 5.3 percent, a par value of $1,000, and a current price of $987. The bonds make semiannual payments. What must the...
-
Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.7 percent paid semiannually and 13 years to maturity. The yield to maturity of the bond is 5.05 percent. What is the...
-
Ive heard that economists build a lot of theories. Thats why I think that economics might be too abstract a course of study. Theories come with a lot of mathematics, diagrams, and complex terms. I...
-
1. You can decide to invest it and increase its value or keep it as is. But what about the uncertainty of two in the bush? The two in the bush are not yours as yet, and we can only speculate about...
-
Context - the circumstances surrounding the problem Question 2: Problem Question 3: Alternatives considered Question 4: Recommended solution for the issue raised Question 5: How to prevent this...
-
Norman Osborn, the founder of Oscorp, had a vision of creating a corporation which steadily grows at 5.5% perpetually. Analysts expect Oscorp to pay $4.2 dividend a year from today. The required rate...
-
Research and develop a Process Improvement Plan for software development application for market paradise project covering the following sections: Introduction (Description of the Project) - 2% What...
-
The director of finance has discovered an error in his WACC calculation. He did not factor in the tax rate when determining the cost of debt. UPC has a line of credit at 4% interest, and the company...
-
Describe all orthonormal bases of R2 for the inner products (a) (b) 0 2 -1 2
-
Audrey purchases a riding lawnmower using a 2-year, no-interest deferred payment plan at Lawn Depot for x dollars. There was a down payment of d dollars and a monthly payment of m dollars. Express...
-
Lakonishok Equipment has an investment opportunity in Europe. The project costs 12 million and is expected to produce cash flows of 1.8 million in Year 1, 2.6 million in Year 2, and 3.5 million in...
-
Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 27,000 solaris, debt in the amount of 11,000 solaris, and equity of 16,000...
-
In the previous problem, assume the equity increases by 1,250 solaris due to retained earnings. If the exchange rate at the end of the year is 1.54 solaris per dollar, what does the balance sheet...
-
The restaurant We Got Veggies, Burgers, and Veggie Burgers wants to advertise its upcoming new menu items. Advertising avenues include television, radio, and newspaper. The number of audience members...
-
Find the general solution to the homogeneous differential equation: a) dy/dx = (x^2 + xy + y^2)/(x^2) b) dy/dx = (x^2 + 3y^2)/(2xy)
-
7 3 What is the least common denominator of and 12'8 55 17 15 The answer is type your answer...
Study smarter with the SolutionInn App