You purchase a KD 3000 face value bond with 5 years remaining inits maturity period. The bond has current yield of 15% and itspayment are KD 45 made every month. If compounding is annually,calculate the following:1. The purchase value of the bond.2. The yield to maturity. (Show trial and error with interpolation)

Bonds represent the form of finance raised by the company from the outsiders in the form of…

Answered: You purchase a KD 3000 face value bond…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has three years until maturity. Required: a. Find the bond's price today and six months from now after the next coupon is paid. b. What is the total (6-month) rate of return on the bond? Complete this question by entering your answers in the tabs below. Required A Required B Find the bond's price today and six months from now after the next coupon is paid. Note: Round your answers to 2 decimal places. Current price Price after six months $ $ 1,052.42 1,044.52
A bond is currently selling for $1040. It pays the amounts listed in the picture at the ends of the next six years. The yield of the bond is the interest rate that would make the NPV of the bond’s payments equal to the bond’s price. Use Excel’s Goal Seek tool to find the yield of the bond.
A 10-year bond with a face value of $1,000 has a coupon rate of 9.0%, with semiannual payments. a. What is the coupon payment for this bond? b. Enter the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ every six months. (Round to the nearest cent.)
You want to form a bond portfolio that pays $100 every six months, for the next year. That is, $100 in 0.5 years and $100 in 1 year. To achieve this goal, you will purchase Bonds A and B, which have a face value of $100 and pay semi-annual coupons. The following information is available: Bond A • Coupon rate (APR): 4.3% Maturity: 1 year Bond B • Coupon rate (APR): 9.5% • Maturity: 1 year Calculate the number of units you must buy of Bond B to achieve your goal. Express your answer as a number with two decimals. E.g. If your answer is 102.544, then enter it as 102.54
Consider bond A with a face value of $500,000 to be repaid at maturity. The maturity of the bond is 2 years. The coupon rate is 8% per annum and coupon payments are made semiannually. The current market rate is 6% p.a. What is the bond’s duration ? Round your final answer to 2 decimal places. E.g. if the final answer is -3.59 years, type -3.59 in the answer box. If the final answer is 3.59 years, type 3.59 in the box .
Consider a bond with a face value of $1,000. The coupon is paid semiannually and the market interest rate (effective annual interest rate) is 8 percent. How much would you pay for the bond if a. the coupon rate is 6 percent and the remaining time to maturity is 10 years?
A bond with a face value of $10,000 pays interest of 3% per year. This bond will be redeemed at its face value at the end of nine years. How much should be paid now for this bond when the first interest payment is payable one year from now and a 5% yield is desired? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 3% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 5% per year. The purchase price of the bond should be $. (Round to the nearest dollar.) ←
You are given the following information aboutr a 20 year bond with face amount 4000. The bond has an anual coupon rate of 8% paid semiannually. the purchase price results is an annual nominal yield rate to the investor of 5.6% convertible semiannually. the amount for amortization of premium in the sixth coupon payment is 32. Calculate the redemption value of the bond.
You purchased a Tk.1,000 bond paying 10 percent semiannual interests two years ago. The bond has a maturity of 8 years and it can be sold today at Tk.960. Use the interpolation technique to calculate the yield to maturity of the bond and What is the annualised yield on the bond? please solve this
Compute the price of the following bonds: Bond A: Coupon bond, 4% coupon paid semi-annually, with maturity of 14 years. Bond B: Zero coupon bond with maturity of 7 years. Bond C: Coupon bond, 7.75% coupon paid yearly, with maturity 10 years. Assume that all 3 bonds have the same nominal: 1000 euro. Your required rate of return is the same for each bond and equal to 6%.
What is the Macaulay duration in years of a 3% coupon bond with 2 years to maturity and a face value of $100? Assume the bond is trading at a yield of 7%, and that coupons are paid semi-annually. Assume semi-annual compounding. Round your answer to 2 decimal places.
A mortgage bond issued by Automation Engineering is for sale for $7,700. The bond has a face value of $10,000 with a coupon rate of 6% per year, payable semi-annually. What rate of return will be realized if the purchaser holds the bond to maturity 6 years from now? The rate of return will be % per year.

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