Marks Private Limited is a growing organization in the industry and is showing progress in terms of capturing new markets in the industry. It has recently introduced a 5 year bond to arrange capital for entering into a new business. The coupon rate announced by the organization is 8% compounded annually with $1000 as a face value and 10% as yield to maturity. Calculate the Present Value of the bond Current yield associated with the bond Also comment that how the present value of the bond will be affected if the yield to maturity will become same as a coupon rate.
Marks Private Limited is a growing organization in the industry and is showing progress in terms of capturing new markets in the industry. It has recently introduced a 5 year bond to arrange capital for entering into a new business. The coupon rate announced by the organization is 8% compounded annually with $1000 as a face value and 10% as yield to maturity. Calculate the Present Value of the bond Current yield associated with the bond Also comment that how the present value of the bond will be affected if the yield to maturity will become same as a coupon rate.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Bonds
- Marks Private Limited is a growing organization in the industry and is showing progress in terms of capturing new markets in the industry. It has recently introduced a 5 year bond to arrange capital for entering into a new business. The coupon rate announced by the organization is 8% compounded annually with $1000 as a face value and 10% as yield to maturity. Calculate the
- Present
Value of the bond - Current yield associated with the bond
- Also comment that how the present value of the bond will be affected if the yield to maturity will become same as a coupon rate.
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