Question

Company B had issued 10-year bonds two years ago at the coupon rate 5.5%. The bond...

Company B had issued 10-year bonds two years ago at the coupon rate 5.5%. The bond makes annual payments. The yield to maturity (YTM) of these bonds is 4%. The face value of the bond is €1000.

a) What is the coupon payment each year?

b) Calculate the current bond price. Is this premium or a discount bond? Explain

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
Company B had issued 10-year bonds a year ago at the coupon rate 10%. The bond...
Company B had issued 10-year bonds a year ago at the coupon rate 10%. The bond makes annual payments. The yield to maturity (YTM) of these bonds is 5%. The face value of the bond is €1000. Calculate the current bond price.
Company B had issued 10-year bonds a year ago at the coupon rate 4%. The bond...
Company B had issued 10-year bonds a year ago at the coupon rate 4%. The bond makes annual payments. The yield to maturity (YTM) of these bonds is 5%. The face value of the bond is $1000. Calculate the current bond price. Company B has a second debt issue on the market, a zero coupon bond with 9.6 years left to maturity. The yield to maturity (YTM) of these bonds is 8 %. The face value of the bond is...
A 15 year bond was issued six years ago. It has a Face Value of $1000...
A 15 year bond was issued six years ago. It has a Face Value of $1000 and makes annual coupon payments of $42. If the current yield to maturity is 4.0% pa, will this bond sell at a premium, discount or at par today? a. premium b. not enough information provided to determine c. at par d. discount
Braemar Corp. issued 30 year bonds 2 years ago at a coupon rate of 7.1%. The...
Braemar Corp. issued 30 year bonds 2 years ago at a coupon rate of 7.1%. The bond makes semi annual payments. If these bonds currently sell for 105% of par/face value, what is the yield to maturity?
Braemar Corp. issued 30 year bonds 2 years ago at a coupon rate of 7.1%. The...
Braemar Corp. issued 30 year bonds 2 years ago at a coupon rate of 7.1%. The bond makes semi annual payments. If these bonds currently sell for 105% of par/face value, what is the yield to maturity.
Suppose BMW issued a bond with 10 years until maturity, a face value of $1000, and...
Suppose BMW issued a bond with 10 years until maturity, a face value of $1000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. a. What was the price of this bond when it was issued? b. Assuming that the YTM remains constant, what is the price of the bond immediately before it makes the first coupon payment? c. Assuming that the YTM remains constant, what is the...
a. Whale Watching Limited issued 14-year bonds one year ago at a coupon rate of 6.9...
a. Whale Watching Limited issued 14-year bonds one year ago at a coupon rate of 6.9 percent. The bonds have a face value of $200 000 and make semi-annual payments. If the YTM on these bonds is 5.5 percent, what is the current bond price? b. If you expect the future inflation rate is low in next 3 years, what characteristics of the straight bond will have a better performance?
•Company Z has issued bonds with a par value of $1000, 20 years to maturity, and...
•Company Z has issued bonds with a par value of $1000, 20 years to maturity, and a coupon rate of 4%. The bond makes semiannual payments. The yield to maturity (YTM) is 6% per annum. •What is the current price of the bond? •What is the effective annual yield on this bond? •Is this a discount or a premium bond? Discuss. •If the market interest rate increases, what happens to this bond price. Discuss. •If this bond would sell at...
Alco issued a 20 year bond two years ago the coupon rate was 7.10% the bonds...
Alco issued a 20 year bond two years ago the coupon rate was 7.10% the bonds make semi-annual payments the par value is $1,000 the bond sell for 105% of par what is the yield to maturity?
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent....
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM = % 2. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT