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What is the price of a $1,000 par value bond with a 6% coupon rate paid semiannually, if the bond

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What is the price of a $1,000 par value bond with a 6% coupon rate paid semiannually, if the bond is priced to yield 5% YTM, and it has 9 years to maturity?

* What would be the price of the bond if the yield rose to 7%?

* What is the current yield on the bond if the YTM is 7%?


Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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Computation of the value of the bond Given information Face value 1 000 00 Coup…View the full answer


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Related Book For  answer-question
Introduction To Corporate Finance

Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Question Posted: September 15, 2012 04:04:22
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Related Video

The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel

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