Question

A $1,000 bond has a coupon rate of 7 percent and matures after 8 years. What...

A $1,000 bond has a coupon rate of 7 percent and matures after 8 years. What would be the bond's current yield if its yield to maturity is 9 percent?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Current price of Bond = Interest rate* PVIFA(RR,N) + Maturity Value * PVIF(RR,N)
1000*7%*5.538 +1000*0.5019
889.56
Current Yeild 1000-889.56
110.44
Currrent Yeild % 110.44/889.56
12.42%
Note:
PVIFA ( 9%, 8Years)                                                                                                             5.5348
PVIF ( 9%, 8Years) 0.5019
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A $1,000 bond has a coupon of 11 percent and matures after 15 years. What would...
A $1,000 bond has a coupon of 11 percent and matures after 15 years. What would be the bond's price if comparable debt yields 6 percent? A$1,179.43 B$840.46 C$922.15 D$1,485.61
An 8%, semi-annual coupon bond has a $1,000 face value and matures in 8 years. What...
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%?
An 8 percent annual coupon, noncallable $1,000 bond has ten years until it matures and a...
An 8 percent annual coupon, noncallable $1,000 bond has ten years until it matures and a yield to maturity of 9.1 percent. What should be the price be?
A coupon bond has an 8% coupon rate and has a par value of $1,000, matures...
A coupon bond has an 8% coupon rate and has a par value of $1,000, matures in 5 years, and has a yield to maturity of 10%. What will be the intrinsic value of the bond today if the coupon rate is 8%?
A bond matures in 8 years and with a coupon rate of 7.8 percent. Coupons are...
A bond matures in 8 years and with a coupon rate of 7.8 percent. Coupons are paid semi-annually. The bond has a face value of $1,000 and currently sells for $866.36. What is the bond’s current yield  (enter answer as a percentage)?
A 7% semiannual coupon bond matures in 6 years. The bond has a face value of...
A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.7242%. What are the bond's price and YTM?
A bond with a par value of $1,000 and a coupon rate of 8% (semiannual coupon)...
A bond with a par value of $1,000 and a coupon rate of 8% (semiannual coupon) has a current yield of 7%. What is its yield to maturity? The bond has 8 years to maturity.
PRICE AND YIELD An 8% semiannual coupon bond matures in 6 years. The bond has a...
PRICE AND YIELD An 8% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 8.4446%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places.
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.3765%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places.    %
27. A 7 percent $1,000 bond matures in 4 years, pays interest semiannually, and has a...
27. A 7 percent $1,000 bond matures in 4 years, pays interest semiannually, and has a yield to maturity of 7.85 percent. What is the current market price of the bond?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT