Your firm has USD debt outstanding with a nominal value of USD 1m and a coupon of

Question:

Your firm has USD debt outstanding with a nominal value of USD 1m and a of 9 percent, payable annually. The first interest payment is due three months from now, and there are five more interest payments afterwards.
(a) If the yield at par on bonds with similar risk and time to is 8 percent, what is the market value of this bond in USD? In Yen (at St = JPY/USD 100)?
(b) Suppose that you want to exchange the service payments on this USD bond for the service payments of a 5.25-year JPY loan at the going yield, for this risk class, of 4 percent. What should be the terms of the JPY loan?
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... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...