Question: How much do you have to pay for a bond rate that pays 6% dividend compounded semianually, with a face value of $5,000 that is

How much do you have to pay for a bond rate that pays 6% dividend compounded semianually, with a face value of $5,000 that is going to be paid (maturity) in 5 years. the buyer wants to have an interest rate profit of 8% compounded semiannually.

a) P= 6,283.32

b) P= 3,094,199.50

c) P= 17,645.64

d) P= 4,594.64

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

How much do you have to pay for a bond rate that pays 6% dividend compounded semiannually, with a face value of $5,000 that is going to be paid (maturity) in 5 years. The buyer wants to have an...

Hi can you please help with this ASAP? I would immensely appreciate it. I will attach the file itself also. For each of the following security combinations draw a graph to show what the payoff would...

Assume that you wish to purchase a bond with a 25-year maturity, an annual coupon rate of 5.9 percent, a face value of RM1,000, and semiannual interest payments. If you require a 8 percent nominal...

Please answer questions. e- textbook Corporate Finance, 3rd Jonathan 'Berk and Peter DeMarzo 1. Which do you prefer: a bank account that pays 6% per year (EAR) for three years or: a. An account that...

EACH QUESTION IS SEPERATE, PLEASE ANSWER ALL Unless otherwise mentioned, the face value of bonds =$1000 1. You are considering buying a machine for $250,000. This machine has a life of 25 years and...

Unless otherwise mentioned, the face value of bonds =$1000 1. You are considering buying a machine for $250,000. This machine has a life of 25 years and will sell for $75,000 scrap value at the end....

home / study / business / finance / finance questions and answers / 1. because of its payment structure, bonds are also know as: fixed income covenants preferred ... Question: 1. Because of its...

The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Currently, the yield to maturity for these bonds is 7.22%. What is the...

Please answer all questions 1. A bond with 14 years to maturity and a coupon rate of 15% has a par or face value 19000. interest is paid annually. If you were required a return of 14% on this bond...

Does putting a contract in writing guarantee that its terms will not be questioned by the parties at the time of performance?

Holly's (MFS) 2023 tax liability is $51,293. Her AGI is greater than $75,000. Her 2023 withholding was $42,910, and she made no other payments during the year. Her 2022 tax liability was $39,570....

Joaquim recently learned about a fund that boasted a 2 5 % return in its marketing materials. Eagerly, he invested $ 1 0 0 , 0 0 0 without doing any research into the fund. A year later, he had $ 1 2...

As per the HBR article on "Choosing the Right Customer", who did Merck choose as their Primary Customer? Governments Advertisers Research Scientists End Customers

2. Based on your research and practical experience, what are some of the most effective ways to ensure successful school-to-work transition?

3. Rachel plans on hiring recruiters to assist her in staffing these 50 positions. Knowing the company will require the recruiters to adhere to the concept of employer branding, describe what steps...

7.1 Define selection and discuss its strategic importance.