Question

**Bond-****valuation**
**Semiannual** **interest**

Find the value of a bond maturing in 7 years, with a 1,000$ par value and a coupon interest rate of 14%(7% paid semiannually) if the required return on similar-risk bonds is 17%

annual interest (8.5% paid semiannually).

The present value of the bond is _____

(Round to the nearest cent.)

Answer #1

the present value of bond = [semi annual coupon payment * present value of annuity factor ] + [face value * present value factor]

here,

semi annual coupon payment = $1,000 * 7% =>$70

present value of annuity factor = [1- (1+r)^(-n)] / r

here,

r = 8.5% =>0.085

n = 7 years * 2 semi annual period =14

=> present value of annuity factor = [1 - (1.085)^(-14)] / 0.085

=> 0.6808582 / 0.085

=>8.01009647

face value = $1,000

present value factor = 1 / (1.085)^14

=>0.31914178

now,

the present value of bond = [8.01009647 * $70] + [0.31914178 * $1,000]

=>$879.85.............(rounded to nearest cent).

The present value of bond is $879.85.

Bond valuation long dash—Semiannual interest. Find the value of
a bond maturing in 7 years, with a $1,000 par value and a coupon
interest rate of 13% (6.5% paid semiannually) if the required
return on similar-risk bonds is 12% annual interest (6% paid
semiannually).
The present value of the bond is $?

Bond valuation-Semiannual interest Find the value of a bond
maturing in 10 years, with a $1000 par value and a coupon
interest rate of 8% (4% paid semiannually) if the required
return on similar-risk bonds is 18% annual interest left
parenthesis 9 % paid semiannually).
The present value of the bond is $

Find the value of a bond maturing in 6 years, with a
$1,000 par value and a coupon interest rate of 14% (7% paid
semi-annually) if the required return on similar-risk bonds is 17%
annual interest (8.5% paid semi-annually).
The present value of the bond is?

Bond valuationlong dashSemiannual interest Find the value of a
bond maturing in 10 years, with a $1000 par value and a coupon
interest rate of 12% (6% paid semiannually) if the required
return on similar-risk bonds is 18% annual interest left
parenthesis 9 % paid semiannually). The present value of the bond
is $

Bond valuation
Nesmith Corporation's outstanding bonds have a $1,000 par value,
a 7% semiannual coupon, 20 years to maturity, and an 8.5% YTM. What
is the bond's price? Round your answer to the nearest cent.
$

Bond valuation—Semiannual interest
Calculate the value of each of the bonds shown in the following
table, all of which pay interest semiannually.
Bond
Par Value
Coupon
interest rate
Years to
maturity
Required stated
annual return
A
$1,000
9
%
9
8
%
B
500
13
20
14
C
500
15
6
15

?(Bond valuation)?Calculate the value of a bond that matures in
17 years and has a $1,000 par value. The annual coupon interest
rate is 12 percent and the? market's required yield to maturity on
a? comparable-risk bond is 9 percent. The value of the bond is
?$____. ? (Round to the nearest? cent.)

(Bond valuation) A bond that matures in 20 years has a $1,000
par value. The annual coupon interest rate is 7 percent and the
market's required yield to maturity on a comparable-risk bond is
13 percent. What would be the value of this bond if it paid
interest annually? What would be the value of this bond if it paid
interest semiannually?

(Related to Checkpoint 9.4) (Bond valuation) A bond that
matures in 12 years has a $1000 par value. The annual coupon
interest rate is 8 percent and the market's required yield to
maturity on a comparable-risk bond is 14 percent. What would be
the value of this bond if it paid interest annually? What would be
the value of this bond if it paid interest semiannually? a. The
value of this bond if it paid interest annually would be $...

A bond that matures in 11 years has a $1,000 par value. The
annual coupon interest rate is 9 percent and the market's required
yield to maturity on a comparable-risk bond is 13 percent. What
would be the value of this bond if it paid interest annually? What
would be the value of this bond if it paid interest
semiannually?
a. The value of this bond if it paid interest annually would
be?
(Round to the nearest cent.)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 6 minutes ago

asked 9 minutes ago

asked 51 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago