Question: Am i solving it right ? A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has
A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has 25 years remaining to maturity Interest rates on similar obligations are now 10 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1.030 Further assume Ms. Bright paid 40 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond to cover the interest costs on the loan a. What is the current price of the bond? Use Table 16:2 (nput your answer to 2 decimal places.) Price of the bond s 1,182 56 b. What is her dollar profit based on the bond's current price? (Do not round Intermediate calculations and round your answer to 2 decimal places.) Dollar profit $ 152 56 c. How much of the purchase price of $1.030 did Ms. Bright pay in cash? (Do not round intermediate calculations and round your answer to 2 decimal places.) $ 412.00 Purchase price paid in cash
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