X 6 6 MAF605 ASSIGNMENT MAY 2021 SEMESTER.. deniskaryn 1 167@gmail.com D - File Home Insert Draw Design Layout References Mailings Review View Help Acrobat Tell me Share Times New Roman - 11 - 4 A E A. B I U abE X x PO ed aste Paragraph Styles Editing Create and Share Request A - ay AA AA AG Adobe PDF Signatures pboard 13 Font Styles 19 Adobe Acrobat Zhen Yi Computers has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semi-annually. The bond was issued 25 years ago and has 5 years to maturity. Required: a. What is the value of the bond assuming 14 percent rate of interest? 3% 38% Answer : 54% Interest rate 12 % / 2 times (semiannually) = 6% Market rate 14 % /2 times (semiannually) =7% Period = 5 years to maturity x 2 = 10 period .146.86 Face value: 6 % * $ 1000 = $ 60 1.4 kB/5 Present value of interest annuity: $ 60 x 7.024 (7% at 10 years) = $ 421.44 Present value of principle: $1000 x 0.508 (10 years) = $ 508 .0 KB/s The value of the bond assuming 14 percent rate of interest is $ 929.44. GB used b. What is the current yield? GB used c. O'Brien Lid.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal annual, not semiannual yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $1,075. What is the bond's nominal coupon interest rate