A Macrohard Corp. bond carries an 8 percent coupon, paid annually and has 10 years to maturity

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A Macrohard Corp. bond carries an 8 percent coupon, paid annually and has 10 years to maturity . The par value is $1000 and the required rate of return is 5%.

1) Calculate the price of the bond today?

2) Calculate is it discount or premium bond ? Explain

3) Calculate the price of the bond one year from now?

If you buy the bond today and sell it one year from now, Calculate:

1) Current yield

2) Capital gain yield

3) Total rate of return

Related Book For answer-question

Fundamentals of Investments Valuation and Management

ISBN: 978-0077283292

5th edition

Authors: Bradford D. Jordan, Thomas W. Miller

Posted Date: May 12, 2023 12:20 AM

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A Macrohard Corp. bond carries an 8 percent coupon, paid annually and has 10 years to maturity

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1 To calculate the price of the bond today we can use the present value formula Price Coupon Payment ... View the full answer

Fundamentals of Investments Valuation and Management

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