A 10 year bond was issued three years ago. It has a FaceValue of $1000 and...
A 10 year bond was issued three years ago. It has a FaceValue of $1000 and makes coupon payments of $23 every six months. If the current yield to maturity is 4.6% p.a. compounding semi-annually, will this bond sell at a premium, discount or at par today?
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![Face value of bond $1,000 Coupon amount- S23 Per period Remaining term = 7 Years * 2 = 14 Periods Yield rate (YTM) = 4.6% *612 = 2.3% Per period Issue price of bondCoupon amount PVIFA(YTM, n)+ Maturity value PVIF(YTM,n) $23 * PVIFA(2.3%. 14) + $1,000 * PVIF(2.3%. 14) -S23 11.85452 S1,0000.727346 $1,000 Since issue price is equal to face value , bond can be issued at par Ans:Bond is issued at Par Note: PVIFA,n)[1-1I -n]/I PVIF(I , n)= 1/(1+1)/ n](http://img.homeworklib.com/questions/6f7b8a80-70bd-11ea-b6ef-e7af8d76057d.png?x-oss-process=image/resize,w_560)
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A 10 year bond was issued three years ago. It has a FaceValue of
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Hi! Can you please help me with these questions as my teacher did not provide the...
Hi!
Can you please help me with these questions as my teacher did
not provide the answers.
Thanks!
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Hi!
Can you please help me with these questions as my teacher did
not provide the answers.
Thanks!
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