Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A company has 15-year bonds with a $5000 maturity value and a quoted coupon rate of 15% paid semiannually. The current yield is 10% compounded semiannually. (Round your answers to the nearest cent.) Suppose that with 8 years remaining until maturity, the yield rate drops to 6% compounded semiannually. Find the new price of these bonds.
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- You have a 30-year Treasury of $1,000 face value that pays 4.4% coupons yearly and has 7.5 years left to maturity. The Yield to Maturity (YTM) of this bond is 5.2% per annum. What is its price? Remember, by convention coupons are assumed to be paid twice a year unless otherwise specified.arrow_forwardA firm plans to issue 20 years bonds with a 7% annual coupon rate. The face value will be $1000 and the bonds will sell at par. If their investment banker charges them flotation costs of 5%, what will the YTM be on the bonds?arrow_forwardI would like to understand how to solve this in Excel. Hardware Inc. bonds are selling in the market for $960.45. These bonds carry a 9 percent coupon paid semiannually, and have 15 years remaining to maturity. What is the capital gain yield assuming that the interest rates will remain constant over the year?arrow_forward
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