Question

You own a 10-year, 5% semi-annual coupon bond with $100 face value. If its yield to maturity is 5.3%, what percentage of its value comes from coupon payments?

Answer #1

Number of periods = 10 * 2 = 20

Semi annual coupon = (5% of 100) / 2 = 2.5

Rate = 5.3% / 2 = 2.65%

Present value of coupon = Annuity * [1 - 1 /(1 + r)^n] / r

Present value of coupon = 2.5 * [1 - 1 /(1 + 0.0265)^20] / 0.0265

Present value of coupon = 2.5 * [1 - 0.592681]/ 0.0265

Present value of coupon = 2.5* 15.370532

Present value of coupon = 38.42633

Present value of face value = Future value / (1 + r)^n

Present value of face value = 100 / (1 + 0.0265)^20

Present value of face value = 100 / 1.687249

Present value of face value = 59.268089

Total value = 38.42633 + 59.268089 = 97.694419

Percentage of value from coupons = (38.42633 / 97.694419) * 100

**Percentage of value from coupons = 39.33%**

QUESTION 1
You own a 10-year, 3% semi-annual coupon bond with $100 face value.
If its yield to maturity is 5.3%, what percentage of its value
comes from coupon payments?
a. 28.0%
b. 34.2%
c. 39.3%
d. 43.8%
e. 47.6%

a. You own a 4-year, 5.1% annual coupon bond with $1,000 face
value. If the yield to maturity is 6.9%, what percentage of the
bond's value comes from the present value of coupon payments?
Answer in percent, rounded to one decimal place.
b. Your company is undertaking a new investment opportunity and
you would like to issue bonds to fund the project. Each bond will
be a 5-year zero-coupon bond with a $1,000 face value. If the bonds
are to...

16. A 10-year bond, $100 face value bond with a 8% coupon rate
and semi-annual coupons has a yield maturity of 5%. The bond should
be trading at a price of $.___ Round to the nearest cent.
17. XYZ company has just issued a 30-year bond with a coupon
rate of %7.5 (annual coupon payments) and a face value of $1,00. If
the yield to maturity is 11%, what is the price of the bond. Round
to the nearest cent....

The US Treasury issued a 10-year bond with an annual coupon of
5% (face value 100). What is its price if the market requires a
yield-to-maturity of 5%? What is its price if its coupon is paid
semi-annually? Please show your work.

What is the value of a 5-year, 8.0% coupon rate, $1,000 face
value bond with semi-annual coupon payments, if similar bonds (same
maturity, same risk profile) are trading at a yield to maturity of
6.25%?

a)You purchase a 3-year US government bond with a face value of
€1,000 and semi-annual coupon payments amounting to €25. The bond
will still make six coupon payments plus pay back the principal. If
the semi-annual yield to maturity is currently 5%, the present
value of this bond would be?
b) Computer stocks currently provide an expected rate of return
of 16%. MBI, a large computer company, will pay a year-end dividend
of €2 per share. If the stock is...

suppose there is a bond with 5% semi-annual coupon payments and
a face value of $1000. there are 10 years to maturity and the
yields to maturity are 7 % what is the price of this bond? show
your calculations.

A semi-annual bond has a face value of $1,000, a coupon rate of
7.2%, a yield to maturity of 5.5% and has 5 years remaining to
maturity. What is the price of the bond?

a) What is the value of a 6-year, 7.7% coupon, $1,000 face value
bond that pays quarterly coupons, if its yield to maturity is 2.8%?
Round to the nearest cent.
b) You own a 17-year, 3.8% annual coupon bond with $1,000 face
value. If the yield to maturity is 8.5%, what percentage of the
bond's value comes from the present value of coupon payments?
Answer in percent, rounded to one decimal place.
c) Your company is undertaking a new investment...

a 10-year bond, $1,000 face value bond with a 8% coupon rate and
semi-annual coupons has a yield to maturity of 12%. the bond should
be trading at the price of? round to nearest cent

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 8 minutes ago

asked 25 minutes ago

asked 34 minutes ago

asked 50 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago