Dmytriw buys a bond with 7 years until maturity. The face value is $100000 and the...
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Dmytriw buys a bond with 7 years until maturity. The face value is $100000 and the coupon rate is 3%. a) If the current interest rate is 5.35% compounded 4 times per year, what is the price of the bond? b) If Dmytriw insists on earning at least 8.75%, what price should he be willing to pay for the bond? c) If Tanya pays $5000 more than what Dmytriw paid in part b), what interest rate is she earning on her investment? Dmytriw buys a bond with 7 years until maturity. The face value is $100000 and the coupon rate is 3%. a) If the current interest rate is 5.35% compounded 4 times per year, what is the price of the bond? b) If Dmytriw insists on earning at least 8.75%, what price should he be willing to pay for the bond? c) If Tanya pays $5000 more than what Dmytriw paid in part b), what interest rate is she earning on her investment?
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Coupon amount every quarter 1000003 4 750 Required Rate of Return for each quarter Current year inte... View the full answer
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Posted Date:
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