1. Madsen Motors's bonds have 16 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 8%, and the yield to maturity is 10%. What is the bond's current market price? Round your answer to the nearest cent. $ 2. A bond has a $1,000 par value, 15 years to maturity, and an 8% annual coupon and sells for $1,080. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. = % b. Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. = $

1. Madsen Motors's bonds have 16 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 8%, and the yield to maturity is 10%. What is the bond's current market price? Round your answer to the nearest cent. $ 2. A bond has a $1,000 par value, 15 years to maturity, and an 8% annual coupon and sells for $1,080. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. = % b. Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. = $

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 10P

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Question

2. A bond has a $1,000 par value, 15 years to maturity, and an 8% annual coupon and sells for $1,080.

a. What is its yield to maturity (YTM)? Round your answer to two decimal places.

= %

b. Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

= $

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