Suppose a​ seven-year, $1,000 bond with a 11.53% coupon rate and semiannual coupons is trading with a yield to maturity of 9.06%. Is this bond currently trading at a​ discount, at​ par, or at a​ premuim? Explain. The bond is currently trading...  ​(Select the best choice​ below.)             A.... at a discount because the coupon rate is greater than the yield to maturity             B.... at a premium because the yield to maturity is greater than the coupon rate             C.... at par because the coupon rate is equal to the yield to maturity             D.... at a premium because the coupon rate is greater than the yield to maturity 2. If the yield to maturity of the bond rises to 9.85% (APR with semiannual​ compounding), at what price will the bond​ trade?

Q: 1. A 12-year bond has a 9 percent annual coupon, a yield to maturity of 8 percent, and a face value…

A: 1) Face value (F) = P 1000 r = YTM = 8% n = 12 years Coupon (C) = 9% of 1000 = P 90

Q: Consider a coupon bond with a face value of $900, one year to maturity, and a coupon rate of 6%…

A: The following formula will be used:

Q: a. What is the duration of a two-year bond that pays an annual coupon of 11.5 percent and has a…

A: A financial instrument that doesn’t affect the ownership of the common shareholders or management of…

Q: Suppose a ten-year, $1,000 bond with an 8.5% coupon rate and semiannual coupons is trading for…

A: Yield to maturity is the return that is obtained on holding the bond till maturity.

Q: Assume that the Financial Management​ Corporation's ​$1,000​-par valuebond has a 7.200% ​coupon,…

A: Given: Particulars Amount Face value $1,000 Coupon rate 7.20% Price 93.75% Yield to…

Q: 5,000

A: Introduction: The highest yield to maturity from a bond is possible when the bond is held up to…

Q: Suppose a ten-year, $1,000 bond with an 8.5% coupon rate and semiannual coupons is trading for…

A: Par value = $1000 Coupon rate = 8.5% Semi annual coupon amount = 1000*0.085/2 = $42.50 Years to…

Q: Suppose a seven-year, $1,000 bond with an 8.4% coupon rate and semiannual coupons is trading with a…

A: Bond is said to be selling at discount when price of the bond in secondary market falls below the…

Q: Suppose a ten-year, $1,000 bond with an 8.9% coupon rate and semiannual coupons is trading for…

A: Given: Bond par value=$1000 Coupon interest rate=8.90% Number of years=10 market price=$1035.78…

Q: A bond for the Chelle Corporation has the following characteristics: Maturity 12 years…

A: Parts a, b and c can be answered as per our policies. For solution to part d, kindly respost this…

Q: Suppose a 10-year, 10 percent, semiannual coupon bond with a par value of R1 000 is currently…

A: 1. ytc formula: YTC=coupon +call price - market pricenumber of years until call×2call price+market…

Q: A friend of yours just invested in an outstanding bond with a 5% annual coupon and a remaining…

A: Face Value                1,000.00 Coupon Rate 5% Yield to Maturity 7% Time Period  10 Given…

Q: Assume that a 10-year Treasury bond pays a coupon of 12% annually, and a 15-year Treasury bond pays…

A: When YTM is more than coupon rate the bond price will be less than the face value and vice versa

Q: A zero-coupon bond has a face value of $1,000 and matures in 7 years. Yield to maturity is 2.3%. How…

A: using excel pv function

Q: hi there,  a-)What is the duration of a two-year bond that pays an annual coupon of 11.4 percent…

A: a) Duration of a two-year bond = 1.5 year.  Workings:  Present value = Cash flow(1+in)n Compute…

Q: a. Nestle has just issued a callable (at par) six-year, 7.5% coupon bond with annual coupon…

A: Face Value = 100 Callable at par hence  Call Price = 100 Market Value = 105 YTM = 6.47% Coupon = 7.5…

Q: Suppose a five-year, $1,000 bond with annual coupons has a price of $903.34 and a yiold to maturity…

A: Following details are given in the question : Face value of bond = $1000 Current price (present…

Q: Suppose a 10​-year, $1,000 bond with a 9% coupon rate and semiannual coupons is trading for a price…

A: a) Computation:

Q: A bond for the Chelle Corporation has the following characteristics: Maturity - 12 years Coupon -…

A: The question is based on the concept of modified duration , its relation with Macaulay duration and…

Q: A 12-year bond, with a fixed coupon rate of 4% and a face value of $1,000 is currently trading at…

A: To get the correct answer, we have to solve for Yield to maturity. However, option B can be…

Q: The yield to maturity of a $1,000 bond with a 7.0% coupon​ rate, semiannual​ coupons, and two years…

A: Price of bond is present value of all future cash flows discounted at rate of return. It can be…

Q: What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is…

A: Given, Maturity (n)  = 15 years sell value (P) = 119% =$1190 bond value(F)= $1000 coupon rate (c)=…

Q: Suppose a​ five-year, $1,000 bond with annual coupons has a price of $903.43 and a yield to maturity…

A: The coupon rate of the bond is the periodic amount that is obtained on the face value of the bond.

Q: Suppose a five-year, $1,000 bond with annual coupons has a price of $900.67 and a yield to maturity…

A: To determine the coupon rate, we need to determine the coupon payment first and then use the coupon…

Q: A zero coupon bond of Rs 10,000 has a term to maturity of seven years and a market yield of 9…

A: Par value is Rs 10,000 Bond type is Zero coupon bond Time period is 7 years Market yield is 9%

Q: Suppose a seven-year, $1,000 bond with a 7.8% coupon rate and semiannual coupons is trading with a…

A: Solution:- The bond pays a fixed amount to its holders every period. This is called coupon. On the…

Q: (a) Compute the market price (Vb) of the following bonds: (6)$1,000 par value, 10-yr…

A: Hello, this question consists of multiple questions so Im answering the first 3 parts of the…

Q: What is the yield to maturity on a 10-year, 9%annual coupon, $1,000 par value bond that sellsfor…

A: Given that;Par value is $1000Present value or selling value is $887Time period is 10 years

Q: A zero-coupon bond has a face value of $1,000 and matures in 14 years. Yield to maturity is 5.7%.…

A: Given details are as follows for zero coupon bond: Face value = $1000 Maturity life = 14 years Yield…

Q: A company has a P1,200 face value bond with 8 years until maturity. The bond possesses a…

A: Approximate Yield to maturity is the rate of return of a bond with an assumption that the bond will…

Q: Suppose that a one-year, risk-free, zero-coupon bond with a $100,000 face value has an market price…

A: Given Information  Face value of zero-coupon bond = $100,000 Market Price = $96,168.36 Number of…

Q: A zero-coupon bond has face value of $1,000 and time to maturity of 2.9 years. If it is currently…

A: Yield to maturity for Zero-Coupon bond = (Face value /Current trade price)1/years to mature -1 Face…

Q: Suppose a five-year, $1,000 bond with annual coupons has a price of $896.99 and a yield to maturity…

A: Price of a bond is calculated as: = (Coupons * Present Value Annuity Factor (i%, n years)) +…

Q: A 10-year bond with a face value of $1,000 currently sells for $1,110. Which of the following…

A: Given Information: Face value - $1,000 Selling price of a bond - $1,110 Period - 10 years

Q: A BBB-rated corporate bond has a yield to maturity of 9.3%. AU.S. Treasury security has a yield to…

A: The present value of the bond depends on several factors like yield to maturity (YTM) rate, coupon…

Q: A bond for WYENARD has a coupon rate of 7%. The yield to maturity is 6.8%. The bond has a remaining…

A: Coupon Rate = 7% YTM = 6.8% N = 30  Annual Coupon Payments   Requirement: Only Answer D. And E.

Q: Suppose a five-year, $1000 bond with annual coupons has a price of $892.55 and a yield-to-maturity…

A: Par value (F) = $ 1000 Price of bond (P) = $ 892.55 Yield (R) = 5.3% Years to maturity (N) = 5 Years

Q: What is the duration of a three-year, $1,000 Treasury bond with a 12 percent semiannual coupon…

A: Price of bond =Present value of coupon payment +Present value of par value  Duration of bond =Sum of…

Q: Suppose a five-year, $1,000 bond with annual coupons has a price of $901.51 and a yield to maturity…

A: Following details are given to us  in the question : Face value of bond = $1000 Maturity life = 5…

Q: Is this bond currently trading at a discount, at par, or at a premium?

A: A bond is defined as the financial instrument that is used to raise capital from the market at a…

Q: Assume that a RM1,000 par value bond has a coupon rate of 5% and will mature in 10  years. It has a…

A: Par Value = 1000 Coupon = Coupon Rate * Par Value = 5%* 1000 = 50 Price = 810.34 N = 10

Q: ABC Bank has a AAA-rated, 15-year zero-coupon bond with a face value of $400 million. The yield to…

A: Modified Duration of Zero coupon Bond = (Macaulay duration of bond) /( 1+ Yield) Macaulay duration…

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like: