Question

Consider the following bond issued by Halliburton:

coupon rate: 7.129%

with semi-annual coupon payments Face value: $1,000

Bond matures in 21 years

Suppose, for the sake of argument, that the annual discount rate is 7.958%, with semi-annual compounding. What is the value of the bond?

Answer #1

**The value of the bond is computed as shown
below:**

**= Coupon payment x [ [ (1 - 1 / (1 + r) ^{n} ] /
r ] + Par value / (1 + r)^{n}**

**The coupon payment is computed as follows:**

= 7.129% / 2 x $ 1,000 (Since the payments are semi annual, hence divided by 2)

**= $ 35.645**

**The discount rate is computed as follows:**

= 7.958% / 2 (Since semi annual compounding, hence divided by 2)

**= 3.979% or 0.03979**

**N is computed as follows:**

= 21 x 2 (Since the payments are semi annual, hence multiplied by 2)

**= 42**

**So, the price of the bond will be as
follows:**

= $ 35.645 x [ [ (1 - 1 / (1 + 0.03979)^{42} ] / 0.03979
] + $ 1,000 / 1.03979^{42}

= $ 35.645 x 20.25093679 + $ 194.2152252

**= $ 916.06 Approximately**

Feel free to ask in case of any query relating to this question

17.
Assume a semi-annual coupon bond matures in 3 years, has a
face value of $1,000, a current market price of $989, and a 5
percent coupon. Which one of the following statements is correct
concerning this bond?
A.
The current coupon rate is greater than 5 percent.
B.
The bond is a money market instrument.
C.
The bond will pay less annual interest now than when it was
originally issued.
D.
The current yield exceeds the coupon rate.
E....

What is the price of the following semi-annual bond?
face
value: $1,000
maturity:
10 years
coupon
rate: 8%
discount
rate: 9%

suppose there is a bond with 5% semi-annual coupon payments and
a face value of $1000. there are 10 years to maturity and the
yields to maturity are 7 % what is the price of this bond? show
your calculations.

Consider the following bond issued by
Walmart: coupon rate: 4.828% face value: $1,000 maturity date:
July 15, 2040 semi-annual coupons settlement date: March 8, 2020
yield (YTM): 4.164% most recent coupon payment date: January 15,
2020
What is the value of the bond? (Equivalently, we are calculating
the “dirty price”.) Express your answer as the dollar and cents
price for a bond with $1,000 face value.

An
8%, semi-annual coupon bond has a $1,000 face value and matures in
8 years. What is the current yield on this bond if the yield to
maturity is 7.8%?

What is the value of a bond that pays a 6% semi-annual coupon,
has a face value of $1,000, matures in 20 years, and has a yield to
maturity of 8%?
Question 45 options:
$803.64
$808.43
$805.12
$802.07

An semi-annual coupon bond with a $2,000 face value matures in 4
years. The bond currently sells for $1627.412 and has a 12 percent
yield to maturity. What is the bond’s nominal coupon rate?

What is the value of a 5-year, 8.0% coupon rate, $1,000 face
value bond with semi-annual coupon payments, if similar bonds (same
maturity, same risk profile) are trading at a yield to maturity of
6.25%?

A semi-annual bond has a face value of $1,000, a coupon rate of
7.2%, a yield to maturity of 5.5% and has 5 years remaining to
maturity. What is the price of the bond?

Genesis corp. issued a 20-year semi-annual bond with a face
value of $1,000, and an annual coupon rate of 8%. The bond
equivalent yield (BEY) is 9%. What is the Bond’s price?
$936
$908
$1,080
$1,000
$966

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