Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 20 years to maturity, and a coupon rate of 7 percent paid annually. |
If the yield to maturity is 8.1 percent, what is the current price of the bond? |
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- i need help with part B please. A government bond with 2 years until maturity has a face value of £120,000 and anannual nominal coupon rate of 1%. Assume that the relevant nominal market interestrate (annualized) is equal to 5%. The coupon payments are made every 6 months.(a) Calculate the present value of the bond. (b) Assume the individual coupons are stripped from the bond and soldseparately as zero coupon bonds. Calculate the market value of these zero couponbonds. Assume there are no further changes to the market rate. How would youexpect the price of the bond to evolve?arrow_forwardEven though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 15 years to maturity, and a coupon rate of 7 percent paid annuallly. If the yield to maturity is 10 percent, what is the current price of the bond?arrow_forwardSuppose a company issues a bond with a par value of €1,000, 5 years to maturity, and a coupon rate of 8.5 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond?arrow_forward
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- (Related to Checkpoint 9.4) (Bond valuation) A bond that matures in 14 years has a $1,000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity on a comparable-risk bond is 13 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? a. The value of this bond if it paid interest annually would be $ (Round to the nearest cent.)arrow_forwardEven though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 7 years to maturity, and a coupon rate of 7.3 percent paid annually. If the YTM is 9.3 percent, what is the current bond price in euros?arrow_forward(Related to Checkpoint 9.4) (Bond valuation) A bond that matures in 20 years has a $1,000 par value. The annual coupon interest rate is 15 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? a. The value of this bond if it paid interest annually would be $ (Round to the nearest cent.)arrow_forward
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