Question

The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 9 years. The bond certificate indicates that the stated coupon rate for this bond is

8.8​% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is

10.3​%, then the price that this bond trades for will be closest​ to:

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Information provided:

Face value= future value= $1,000

Time= 9 years*2= 18 semi-annual periods

Coupon rate= 8.8%/2= 4.4%

Coupon payment= 0.044*1,000= $44

Yield to maturity= 10.3%/2= 5.15%

The price of the bond is calculated by computing the present value.

The below has to be entered in a financial calculator to compute the present value:

FV= 1,000

N= 18

PMT= 44

I/Y= 5.15

Press the CPT key and PV to calculate the present value.

The value obtained is 913.35.

Therefore, the price of the bond is $913.35.

In case of any query, kindly comment on the solution.

Add a comment
Know the answer?
Add Answer to:
The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

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
  • The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 5 years. The bond certificate indicates that the stated coupon rate for this bond is 8.6% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 12%, then the price that this bond trades for will be closest to:

  • The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 years. The bond cer...

    The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8.8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 10.8% , then the price that this bond trades for will be closest to: a. $853 b. $1,194 c. $682 d. $1,024

  • The Sisyphean Company has a bond outstanding with a face value of $ 1000 that reaches...

    The Sisyphean Company has a bond outstanding with a face value of $ 1000 that reaches maturity in 8 years. The bond certificate indicates that the stated coupon rate for this bond is 9​% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 10.3​%, then the price that this bond trades for will be closest​ to:

  • The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 10 years. The bond certificate indicates old that the stated coupon rate for this bond is 9% and that the coupon payments are to be made semiannually Assuming the appropriate YTM on the Sisyphean bond is 9.7%, then the price that this bond trades for will be closest to O A. $1,338 OB. $765 O C. $956 OD. $1,147

  • The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 5 years. The bond certificate indicates that the stated coupon rate for this bond is 8.9% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 10.4%, then the price that this bond trades for will be closest to: O A. $943 OB. $1,131 O c. $754 OD. $1,320

  • The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 8 years. The bond certificate indicates that the stated coupon rate for this bond is 8.6​% and that the coupon payments are to be made semiannually. Assuming that this bond trades for $ 963​, then the YTM for this bond is closest​ to:

  • The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 9 years. The bond certificate indicates that the stated coupon rate for this bond is 84% and that the coupon payments are to be made semiannually Assuming the appropriate YTM on the Sisyphean bond is 9.8%, then the price that this bond trades for will be closest to O A. $3,670 O B. $4,588 OC. $5,505 OD. $6,423

  • The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 10 years. The bond certificate indicates that the stated coupon rate for this bond is 8.8% and that the coupon payments are to be made semiannually. Assuming that this bond trades for $4,684, then the YTM for this bond is closest to: O A. 13.7% O B. 7.8% OC. 9.8% OD. 11.8%

  • The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity...

    The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coup rate for this bond is 8.2% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 10.4%, then the price that this bond trades for will be closest to: O A. $5,843 OB. $4,173 OC. $3,339 D. $5,008

  • The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 15 years. The bond cer...

    The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 88​% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 11.5​%, then the price that this bond trades for will be closest​ to: A.$4,515 B.$3,010 C.$5,268 D. $ 3763

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