HomeworkLib
Question

Bond Price

Consider a bond which pays 7% semi-annually and has 8 years to maturity. The market requires an interest rate of 8% on bonds of this risk. What is this bond's price?

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

Homework Answers

Answer #1
Bond   Valuation Semi Annual Coupon
B= PV anninuity + PV Principal repay
B=   (C*F/m) x [(1/(r/m)) - (1/(r/m*(1+(r/m))^(n*m))] + [F/(1+(r/m))^(n*m)]

m Is payments per year = semi annual = 2

F is assumed $1000

r = 8%

c = 7%

n = 8yrs


BV = $941.74

answered by: D4nni00
0 0
Add a comment
Know the answer?
Add Answer to:
Bond Price
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

  • Consider a bond which pays 8% semiannually and has 8 years to maturity. The market requires...

    Consider a bond which pays 8% semiannually and has 8 years to maturity. The market requires an interest rate of 8% on bonds of this risk. What is this bond's price? (Assume the Face Value of the bond is $1000) a.$530.58 b.$891.62 c.$893.30 d.$3129.17

  • Question 18 1 pts Consider a $1,000 par value bond which pays an annual coupon rate...

    Question 18 1 pts Consider a $1,000 par value bond which pays an annual coupon rate of 7% and has 8 years to maturity. Interest is paid semi-annually. If the required rate of return is 8% (annually), what is this bond's price? $942.50 $911.52 $941.74 $1,064.81 None of the above. Question 19

  • 19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value,...

    19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value, and pays interest semi-annually. What is the bond's current price if the yield to maturity is 6.97 percent? A. $799.32 B. $848 16 C. $917.92 D. $1,005.46 E. None of the above.l 19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value, and pays interest semi-annually. What is the bond's current price if the yield to maturity is...

  • (1) (Bond Valuation) a bond that matures in 9 years has a $1000 par value. the...

    (1) (Bond Valuation) a bond that matures in 9 years has a $1000 par value. the annual coupon interest rate is 14% and the markets required yield to maturity on a comparable risk-bond is 16%. what would be the value of this bond if it paid interest annually? what would be the vale of this bond if it paid interest semi-annually? (2) (yield to maturity) the market price is $850 for a 12-year bond ($1000 par value) that pays 9%...

  • FMA Inc has issued a $1000 par value bond that matures in 14 years. The bond...

    FMA Inc has issued a $1000 par value bond that matures in 14 years. The bond pays semi-annual coupons at a rate of 7.5% APR compounded semi-annually, with first coupon payment due 6-months from today. What is the bond's price if the market requires a 9.5% yield to maturity on this bond?

  • John Deere has an 7% coupon bond outstanding. It has a $1,000 face value, matures in exactly 14 years (28 semi-annual pe...

    John Deere has an 7% coupon bond outstanding. It has a $1,000 face value, matures in exactly 14 years (28 semi-annual periods) and pays interest semi-annually. If current market rates for bonds of this quality are 5.4%, what is the bond's price?

  • John Deere has an 7% coupon bond outstanding. It has a $1,000 face value, matures in exactly 14 years (28 semi-annual pe...

    John Deere has an 7% coupon bond outstanding. It has a $1,000 face value, matures in exactly 14 years (28 semi-annual periods) and pays interest semi-annually. If current market rates for bonds of this quality are 5.4%, what is the bond's price?

  • 1 - (Yield to Maturity) A 35 year bond pays 7% interest annually on a $1000...

    1 - (Yield to Maturity) A 35 year bond pays 7% interest annually on a $1000 par value. if the bonds sell at $815 what is the bonds yield to maturity? what would be the yield to maturity if the bond paid interest semiannually? 2 - (Bond Valuation) An 18-year, $1000 par value bonds pay 11% interest annually. The market price of the bonds is $1110 and the market required yield to maturity on a comparable risk bond id 8%....

  • 1) Consider a 10-year bond trading at $1150 today. The bond has a face value of...

    1) Consider a 10-year bond trading at $1150 today. The bond has a face value of $1,000, and has a coupon rate of 8%. Coupons are paid semiannually, and the next coupon payment is exactly 6 months from now. What is the bond's yield to maturity? 2)A coupon-paying bond is trading below par. How does the bond's YTM compare to its coupon rate? a. Need more info b. YTM = Coupon Rate c. YTM > Coupon Rate d. YTM <...

  • please show how to compute with a financial calculator. thank you! Bond Valuation Exercises: OM Question...

    please show how to compute with a financial calculator. thank you! Bond Valuation Exercises: OM Question 1. GTF Corporation has 5 percent coupon bonds on the market with a par of $1,000 and 10 years left to maturity. The bonds make annual interest payments. If the market interest rate on these bonds is 7 percent, what is the current bond price? Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8...

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