Four years ago, James, Inc issued a bond with a par value = $1,000, Coupon rate =
Fantastic news! We've Found the answer you've been seeking!
Question:
Four years ago, James, Inc issued a bond with a par value = $1,000, Coupon rate = 5.0% annum, payable every 6-months, and a maturity of 20-years. The YTM of similar bonds today is 9.0%. What is the price of James Bond today
FV | 1000 |
COUPON | 5% |
PMT | 25 |
YEARS | 16 |
YTM | 9% |
THE PRICE OF THE BOND IS | $664.22 |
Johnny bought James Bond (as in Q#3) at $950 when it was originally issued (20-years ago). If he holds on to James bond until it matures, what rate of return will he earn?
Number of periods (Nper) | 40 |
Semiannual coupon payment (PMT) | 25 |
Price of the bond (PV) | 950 |
Face value (FV) | 1000 |
Number of payments per year | 2 |
Rate of return (Rate) | 0.0541 |
If Johnny decides to sale James bond today, what rate of return would he earn?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
Posted Date: