Question

As an investor you decide to purchase the new issue of COSTCO's new Bond issue. The...

As an investor you decide to purchase the new issue of COSTCO's new Bond issue.

The 7-year maturity semiannual-pay bond has a bullet cash flow structure with a fixed rate coupon of 3.4% and will sell at an initial yield of 2.75%.

Based on this information, what is the value (price) of the bond assuming $100 of par value (closest to)?

$100

$94.6

$104.1

$93.4

$103.8

$
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
An investor is considering purchasing a new issue of 5-year bonds of $1,000 par value and...
An investor is considering purchasing a new issue of 5-year bonds of $1,000 par value and an annual fixed coupon rate of 12%, while coupon payments are made semiannually. The minimum annual yield that the investor would accept is 6.75%. find the fair value of a bond? Select one: a. 717.5$ b. 1123.4$ c. 876.5$ d. 1219.7$ The price of a corporate bond which has a par value of $1000 and coupon payment is 5% and yield is 8%. The...
Suppose an investor can purchase a 6-year 9% coupon bond with a par value of $100...
Suppose an investor can purchase a 6-year 9% coupon bond with a par value of $100 that pays interest semi-annually. The yield to maturity for this bond is 10% on a bond-equivalent yield basis. What is the coupon interest, capital gain/loss and reinvestment income associated with this bond over its 6-year life? Assume that the reinvestment rate is equal to the yield to maturity.
Suppose an investor can purchase a 6-year 9% coupon bond with a par value of $100...
Suppose an investor can purchase a 6-year 9% coupon bond with a par value of $100 that pays interest semi-annually. The yield to maturity for this bond is 10% on a bond-equivalent yield basis. What is the coupon interest, capital gain/loss and reinvestment income associated with this bond over its 6-year life? Assume that the reinvestment rate is equal to the yield to maturity.
Redd Industries has just issued a callable, $1000 par value, five-year, 5% coupon bond with semiannual...
Redd Industries has just issued a callable, $1000 par value, five-year, 5% coupon bond with semiannual coupon payments. The bond can be called at par in three years or anytime thereafter on a coupon payment date. If the bond is currently trading for $950.00, then its yield to maturity is closest to: Select one: A. 6.5% B. 6.18% C. 6.0% D. 6.8% Redd Industries has just issued a callable, $1000 par value, five-year, 5% coupon bond with semiannual coupon payments....
​Zero-coupon bond. Addison Company will issue a zero-coupon bond this coming month. The​ bond's projected yield...
​Zero-coupon bond. Addison Company will issue a zero-coupon bond this coming month. The​ bond's projected yield is 8%. If the par value is ​$1,000​, what is the​ bond's price using a semiannual convention if a. the maturity is 20 years? b. the maturity is 35 ​years? c. the maturity is 60 ​years? d. the maturity is 80 ​years?
Suppose an investor can purchase a 20 year, 5% coupon bond that pays interest semi annually...
Suppose an investor can purchase a 20 year, 5% coupon bond that pays interest semi annually and the price of the bond is 97%. The Par Amount is $100. The yield to maturity is 5.95%. Assume the investor can reinvest the coupon payments at an annual rate of 3%. The bond is only held for 5 years and sold at 89%. Compute the following: What is the Total Coupon plus Interest on Interest in Dollars? What is the (Total Interest...
New homes has a bond issue with the coupon rate of 5.5% that matures in 8.5...
New homes has a bond issue with the coupon rate of 5.5% that matures in 8.5 years the bonds have a par value of 1000 in the market price of 1022 interest is paid semiannually what is the yield to maturity
​Zero-coupon bond. Wesley Company will issue a zero-coupon bond LOADING... this coming month. The projected bond...
​Zero-coupon bond. Wesley Company will issue a zero-coupon bond LOADING... this coming month. The projected bond yield LOADING... is 6%. If the par value LOADING... is ​$5,000​, what is the​ bond's price using a semiannual convention if a. the maturity LOADING... is 10 ​years? b. the maturity is 40 ​years? c. the maturity is 60 ​years? d. the maturity is 100 ​years? Part B Callable bond. Corso Books has just sold a callable bond. It is a​ thirty-year monthly bond...
An investor bought a 20-year bond at par with a semiannual coupon and a 3% yield-to-maturity....
An investor bought a 20-year bond at par with a semiannual coupon and a 3% yield-to-maturity. One year later, due to a decline in interest rates, she sold the bond at a 2% yield to maturity. What was her capital gain or loss? 15.7% 8.6% 18.7% 16.4% 14.3%
A) Today is February​ 15, 2008 Type. Issue Date.   Price. Coupon Rate.   Maturity Date.    YTM....
A) Today is February​ 15, 2008 Type. Issue Date.   Price. Coupon Rate.   Maturity Date.    YTM.   Current Yield. Rating. Note Feb 2003. ? 6.75% 2-15-2013. 5.532%. ------- AAA What is the price in dollars of the February 2003 Treasury note with semiannual payment if its par value is ​$100,000​? What is the current yield of this​ note? B) Today is February​ 15, 2008 Type. Issue. Date. Price​ (per $100 par ​value) Coupon Rate.    Maturity Date. YTM.    Current Yield....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT