1. A bond with a face value of $1000 and 15 years remaining until maturity, pays a...
Question:
1. A bond with a face value of $1000 and 15 years remaining until maturity, pays a coupon rate of 5% compounded semiannually. What yield (compounded semiannually) to maturity is earned by an investor who purchases this bond for $965?
2.
Calculate the purchase price of the $1000 face value of the bond. (Assume that bond interest is paid semiannually, that the bond was originally issued at its face value, that the bond is redeemed for its face value at maturity and that the market rate of return is compounded semiannually.)
Issue Date | Maturity Date | Purchase Date | Coupon Rate | Market Rate |
March 15, 2002 | March 15, 2027 | October 5, 2008 | 5.5% | 6.0% |
MATCH the inputs on the left with the corresponding value on the right to calculate the PV of the face value of the bond.
Question 23 options:
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3.
Calculate the purchase price of the $1000 face value of the bond. (Assume that bond interest is paid semiannually, that the bond was originally issued at its face value, that the bond is redeemed for its face value at maturity and that the market rate of return is compounded semiannually.)
Issue Date | Maturity Date | Purchase Date | Coupon Rate | Market Rate |
March 15, 2002 | March 15, 2027 | October 5, 2008 | 5.5% | 6.0% |
MATCH the inputs on the left with the corresponding value on the right to calculate the FV of the bond price preceeding the purchase date. (Final step)
Question 24 options:
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Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim