Question

A company has a 10% bond that has a face value of $1000 and matures in...

A company has a 10% bond that has a face value of $1000 and matures in 10 years. Assume that coupon payments are made semi-annually. The bonds can be called after 5 years at a premium of 5% over face value. What is the value of the bond if rates drop immediately to 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
A bond has a coupon ate of 10%, a 1000$ face value, matures in 5 years,...
A bond has a coupon ate of 10%, a 1000$ face value, matures in 5 years, has a yield of maturity of 15% percent and pays interest annually. What is the current yield?
A bond has a face value $1000, maturity of 10 years, and a coupon rate of...
A bond has a face value $1000, maturity of 10 years, and a coupon rate of 8%, paid semi-annually. Assuming the yield-to-maturity is 10%, the current price of the bond is:
A bond with a face value of $1000 made a payment earlier today and has exactly...
A bond with a face value of $1000 made a payment earlier today and has exactly 2 years left until it matures. The bond makes semi-annual payments of $40 each. Currently, the interest rate on newly-issued, same-risk bonds is 8.62%. What is the value of this bond?
A bond has a coupon rate of 4.6% and pays coupons semi-annually. The bond matures in...
A bond has a coupon rate of 4.6% and pays coupons semi-annually. The bond matures in 5 years and the yield to maturity on similar bonds is 2%. Is this a par, premium or discount bond? What is the price of the bond?   What is the coupon rate for the bond? Assume semi-annual payments. Answer as a percent! Bond Coupon Rate Yield Price Quote t Apple B ? 3.7% 99.09 21
2 years ago, a company issued a 10-year, 9% coupon bond with a face value of...
2 years ago, a company issued a 10-year, 9% coupon bond with a face value of $1000. The bond makes quarterly coupon payments. Today, the bond yields APR of 10% compounded semi-annually. What is the price of the bond today?
You are considering investing in a $1000 face value 8% semi-annual coupon bond with 3 years...
You are considering investing in a $1000 face value 8% semi-annual coupon bond with 3 years left to maturity. Similar bonds are yielding 9.5% in the market, so the current price of this bond is _______, and if market interest rates drop to 8.25% the selling price of the bond would _____________?
A bond that matures in 12 years has a par value of $1000 and an annual...
A bond that matures in 12 years has a par value of $1000 and an annual coupon rate of 10%. The market interest rate is 8%. What is its price? Is it a premium or discount bond?
Jupiter Aviation Inc. has 2 different bonds outstanding. Bond A has a face value of $35,000...
Jupiter Aviation Inc. has 2 different bonds outstanding. Bond A has a face value of $35,000 and a maturity of 10 years. It makes no coupon payments over the life of the bond. Bond B also has a face value of $35,000 with 10 years to maturity. It makes no payments for the first 5 years, then pays $1,000 every 6 months over the subsequent 2 years, and finally pays $2,000 every 6 months over the last 3 years. If...
Bond A with a $1000$1000 par value pays coupons semi-annually at 4.44.4% and matures in 55...
Bond A with a $1000$1000 par value pays coupons semi-annually at 4.44.4% and matures in 55 years and 44 months. Bond B is a zero coupon bond with the same face value, time to maturity, and similar risk as Bond A and trades at $$788788. What is the dirty (or actual) price of Bond A, the coupon paying bond? $$ (Give answer to 2 decimal places)
A company releases a? five-year bond with a face value of? $1000 and coupons paid semiannually....
A company releases a? five-year bond with a face value of? $1000 and coupons paid semiannually. If market interest rates imply a YTM of 8%, which of the following coupon rates will cause the bond to be issued at a? premium? A. 6% B.10% C. 8% D. 5%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT