Question

Assume a bond with the following parameters: What is it's Yield to Maturity? Par Value $1,000...

Assume a bond with the following parameters: What is it's Yield to Maturity?

Par Value $1,000

Call Premium $75 Coupon

Rate 6.00%

Payments are Made Semi-Annually

Years to Maturity 20

Years to Call 10

Current Market Price $1,200

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
                  K = Nx2
Bond Price =∑ [(Semi Annual Coupon)/(1 + YTM/2)^k]     +   Par value/(1 + YTM/2)^Nx2
                   k=1
                  K =20x2
1200 =∑ [(6*1000/200)/(1 + YTM/200)^k]     +   1000/(1 + YTM/200)^20x2
                   k=1
YTM% = 4.48
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
Assume a bond with the following parameters: What is it's Price to Call? Par Value $1,000...
Assume a bond with the following parameters: What is it's Price to Call? Par Value $1,000 Call Premium $100 Coupon Rate 9.00% Payments are Made Semi-Annually Years to Maturity 30 Years to Call 15 Desired Return on Investment 12.00%
PART 2 - BOND CALCULATIONS a) What is the price of a $1,000 par value, semi-annual...
PART 2 - BOND CALCULATIONS a) What is the price of a $1,000 par value, semi-annual coupon bond with 16 years to maturity, a coupon rate of 5.40% and a yield-to-maturity of 5.90%? b) What is the price of a $1,000 par value, 10 year, annual coupon bond with a 5.80% coupon rate and a yield to maturity of 5.50% c) A 10-year, 6.30% semi-annual coupon bond today and the current market rate of return is 5.60%. The bond is...
An 8% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in...
An 8% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in 7 years at a call price of $1,200. If the bond is selling today for $900, the yield to call is closest to
You own a bond with a 5% coupon rate and $1,000 par value. Assume payments are...
You own a bond with a 5% coupon rate and $1,000 par value. Assume payments are made semi-annually and the bond matures in 20 years. The annual market interest rate is 9% percent. What is the value of the bond?
1)What is the price of a bond if the par value is $1000, the coupon rate...
1)What is the price of a bond if the par value is $1000, the coupon rate is 5%(paid semi-annually), has 20 years to maturity and the market rate (yield to maturity per annum) is 8%? A. $683.11 B. $703.11 C. $813.11 D. $923.11 E. 1063.11 2) What is the coupon rate of a bond with a par value of $1000, it is currently selling for $800, has 15 years to maturity and the market rate (yield to maturity) is 10%...
Compute the Yield to Call (YTC) of a 9% coupon bond, with a $1,000 face value...
Compute the Yield to Call (YTC) of a 9% coupon bond, with a $1,000 face value maturing 20 years from now, but callable in 10 years with a call price of $1,300. Assume the market price of the bond to be $750 and that the coupons are: a)   paid annually. b)   paid semi-annually.
A 5 percent coupon bond has 20 years left to maturity and has a price quote...
A 5 percent coupon bond has 20 years left to maturity and has a price quote of 95 (quoted bond price is $950). The bond can be called in five years and if called would generate a yield to call of 8 percent. Compute the bond's current yield, yield to maturity and call price. (Assume interest payments are paid semi-annually and a par value of $1,000.)
A 5 percent coupon bond has 20 years left to maturity and has a price quote...
A 5 percent coupon bond has 20 years left to maturity and has a price quote of 95 (quoted bond price is $950). The bond can be called in five years and if called would generate a yield to call of 8 percent. Compute the bond's current yield, yield to maturity and call price. (Assume interest payments are paid semi-annually and a par value of $1,000.)   
A 5 percent coupon bond has 20 years left to maturity and has a price quote...
A 5 percent coupon bond has 20 years left to maturity and has a price quote of 95 (quoted bond price is $950). The bond can be called in five years and if called would generate a yield to call of 8 percent. Compute the bond's current yield, yield to maturity and call price. (Assume interest payments are paid semi-annually and a par value of $1,000.)
1. A $1,000 par value corporate bond that pays $60 annually in interest was issued at...
1. A $1,000 par value corporate bond that pays $60 annually in interest was issued at par last year. The current price of the bond is $996.20. Pick the correct statement about this bond from below. The bond is currently selling at a premium. The current yield exceeds the coupon rate. The bond is selling at par value. The current yield exceeds the yield to maturity. The coupon rate has increased to 7 percent. 2. Dot Inns is planning on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT