HomeworkLib
Question

What is the present value of a bond with a par value of $1000, a coupon...

What is the present value of a bond with a par value of $1000, a coupon rate of 8% and a maturity of 5 years assuming you have a 10% discount rate? Assume your coupons are paid once per year.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Present value of bond = =-pv(rate,nper,pmt,fv)
= $     924.18
Where,
rate = 10%
nper = 5
pmt = $             80
fv = $       1,000
0 0
Add a comment
Know the answer?
Add Answer to:
What is the present value of a bond with a par value of $1000, a coupon...
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. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Problem 1: Consider a $1000 bond with a coupon rate of 10% and annual coupons. The...

    Problem 1: Consider a $1000 bond with a coupon rate of 10% and annual coupons. The par value is $1,000, and the bond has 5 years to maturity. The yield to maturity is 9%. For each question, show your work/calculations. A. What is the present value of coupons? B. What is the present value of face value (i.e. par value)? C. What is the value of the bond? D. Is it a premium or discount bond? Problem 2: Consider a...

  • Problem 2: Consider a $1000 bond with a coupon rate of 7.5% and annual coupons. The...

    Problem 2: Consider a $1000 bond with a coupon rate of 7.5% and annual coupons. The par value is $1,000, and the bond has 10 years to maturity. The yield to maturity is 10%. For each question, show your work/calculations. What is the present value of coupons? What is the present value of face value (i.e. par value)? What is the value of the bond? Is it a premium or discount bond? Value of bond > par value, premium bond

  • Problem 1: Consider a $ 1000 bond with a coupon rate of 10% and annual coupons....

    Problem 1: Consider a $ 1000 bond with a coupon rate of 10% and annual coupons. The par value is $1,000, and the bond has 5 years to maturity. The yield to maturity is 9 %. For each question, s how your wo rk/ calculations . A. What is the present value of coupons ? B. What is the present value of face value (i.e. par value) ? C. What is the value of the bond ? D. Is it...

  • A 20-year bond with a coupon rate of 8% and par value of $1000 currently has...

    A 20-year bond with a coupon rate of 8% and par value of $1000 currently has a yield to maturity of 6%. The bond is callable in 5 years with a call price of $1100. What is the bond’s yield to call? A zero-coupon bond with 10 years remaining until maturity and a par value of $1000 has a yield to maturity of 10%. What is the bond’s price? (Financial calculator please)

  • 3- . Bond X is an 8% semi-annual coupon bond with a par value of $1000...

    3- . Bond X is an 8% semi-annual coupon bond with a par value of $1000 and a maturity of 10 years. The bond has a YTM of 7%. What is the value of the bond? 4. Bond J is a 10% semi-annual coupon bond with a par value of $1000 and a maturity of 2 years. If the assumed spot rates for a two year period are as follows, what is the value of the bond? Maturity (in years)...

  • What is the price of a 30 year bond with a $1000 par value? The bond...

    What is the price of a 30 year bond with a $1000 par value? The bond has a 5% coupon rate, pays semi-annual coupons, and has a 8% yield to maturity. A. $662.27 B. $1,461.17 C. $6,60.65 D. $1,321.30

  • 1) Sam owns a $1000 par value corporate bond with 10 years to maturity and 5%...

    1) Sam owns a $1000 par value corporate bond with 10 years to maturity and 5% coupon rate. If the current interest rate is 10%, what is the current price of the bond. 2) Calculate the current price of a 3-year semi-annual bond with 5% coupon rate and 6% market discount rate. Assume par is $1000. 3) A bond that was first issues exactly two years ago today had an original maturity of 17 years, a coupon rate of 7.5%,...

  • 1. What is the current price of a $1000 par value bond if has 12.5 years...

    1. What is the current price of a $1000 par value bond if has 12.5 years until maturity, a YTM of 6.6%, and a coupon rate of 6% with semi-annual coupon payments? 2.The bonds of Lapeer Airlines, Inc., are currently trading on the market at $1,119.34. They have a par value of $1000, make semi-annual coupon payments with a coupon rate of 6.4%, and a YTM of 4.6%. How many years until these bonds mature? 3.You have decided to try...

  • 3) Consider a $1000 par value bond with a 5% coupon rate and semiannual coupons. The...

    3) Consider a $1000 par value bond with a 5% coupon rate and semiannual coupons. The bond has a maturity of 4 years. Draw a time line showing the cash flows of this bond.

  • A three-year maturity bond with a 12% annual coupon rate is currently traded at par $1000...

    A three-year maturity bond with a 12% annual coupon rate is currently traded at par $1000 per bond. If you purchased it at that price today, and reinvest all the coupons until maturity what would your average annual expected rate of return be over the next three years?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT