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Investments in the marketplace currently yield 5%. Therefore, a GM 4% coupon bond, maturing in 3 years, will be priced at?
I know the correct answer is $973 but I don't understand why
Interest = $1,000 * 0.04 = $40
Current bond price = $40(PVIFA 5%,3) + $1,000(PVIF 5%,3)
Current bond price = ($40 * 2.72325) + ($1,000 * 0.86384)
Current bond price = $973
Investments in the marketplace currently yield 5%. Therefore, a GM 4% coupon bond, maturing in 3...
A certain 5% annual coupon rate convertible bond (maturing in 20 years) is convertible at the holder's option into 17 shares of common stock. The bond is currently trading at $790. The stock(which pays 56¢ a share in annual dividends) is currently priced in the market at $33.79 a share. QUESTIONS: HUGE THUMBS UP FOR CORRECT ANSWERS c. The conversion value of this issue is (blank) $ ? (Round to the nearest cent.) d.. The conversion premium in dollars is...
A 5% semiannual coupon bond maturing in 5 years with a par value of $100 is trading at $95. Calculate the yield to maturity.
What is the yield to maturity on the following bond: par value, semi-annual coupon of 5 percent, maturing in six years and currently trading for ? Building Financial Security
A bond maturing in 7 years has a yield to maturity of 3.4%, an annual coupon rate of 4% paid biannually, and a face value of $10,000. What is the value today? A. 9,937.77 B. 10,998.32 C. 9,818.10 D. 9,735.42 E. 10,370.97
A 5% semiannual coupon $100 bond maturing in 15 years is callable on any coupon date after the 10th. If called on the 11th through 20th coupon date, the redemption value would be $110. If callable on the 21st through 30th coupon date, redemption would be at par. Find the price that would ensure an investor a minimum yield of 3% per annum compounded semiannually
What is the value of a Zero Coupon Bond with $1,000 Face Amount, maturing in 3 years. Assume similar bonds have a Yield to Maturity (YTM) of 3.5%
What is the value of a bond that has an annual coupon of 12%, a maturity of 5 years and the market yield is currently at 8%? What is the value of a bond that has an annual coupon of 7%, a maturity of 10 years and the market yield is currently at 8%? What is the value of a bond that has an annual coupon of 8%, a maturity of 15 years and the market yield is currently at...
4. Suppose a coupon bond with a par value of $1,000 is currently priced at $950 and has a coupon of $40. Which of the following is true? A) current yield < coupon rate B) current yield> coupon rate C) coupon rate has risen D) coupon rate has declined
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon rate of 8.60%, 5 years to maturity and a yield to maturity of 9.20% Find the equilavent years to maturity of a zero-coupon bond to one that has a coupon rate of 660% (annual coupons) 10 years to maturity, and a yield to maturity 3 of 6.00%. Find the approximate percentage change in the price of a bond due to a 10 basis point...
7. The yield to maturity on 5 % annual coupon bonds maturing at 1000 Par is as follows: Term (years) Yield 6.0% 6.5% 7.0% Calculate the 1, 2 and 3 year spot rates.