Homework Help is Here – Start Your Trial Now!
Business
Finance
4. A 5-year, Debenture bond with a face value of P15,000 with a coupon rate of 9% per annum, interest payable quarterly is offered to you at 98-1/2. If your required rate of return is 12% p.a. What is the approximate yield to maturity of the bond?

4. A 5-year, Debenture bond with a face value of P15,000 with a coupon rate of 9% per annum, interest payable quarterly is offered to you at 98-1/2. If your required rate of return is 12% p.a. What is the approximate yield to maturity of the bond?

Essentials Of Investments
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
See similar textbooks
icon
Related questions
Question

show solution and answer

4. A 5-year, Debenture bond with a face value of P15,000 with a coupon rate of 9% per annum, interest payable quarterly is offered to you at 98-1/2. If your required rate of return is 12% p.a. What is the approximate yield to maturity of the bond? 5. Shada invested 5 bonds, 10-year, 11% Mortgage bond with as face value of P50,000. Interest due every June and Dec. Three bonds are offered to Shawn at 103-3/4. This has still 6 years remaining life and Shawn expects a return of 10% from this investment. a. At the offered price, what is the exact YTM of the bond?. b. What is the value of the bond? 6. FTG's P1,000 par value bonds currently sell for P798.50. The coupon rate is 10% paid quarterly. If the bonds have five years before maturity, what is the approximate YTM?
Transcribed Image Text:4. A 5-year, Debenture bond with a face value of P15,000 with a coupon rate of 9% per annum, interest payable quarterly is offered to you at 98-1/2. If your required rate of return is 12% p.a. What is the approximate yield to maturity of the bond? 5. Shada invested 5 bonds, 10-year, 11% Mortgage bond with as face value of P50,000. Interest due every June and Dec. Three bonds are offered to Shawn at 103-3/4. This has still 6 years remaining life and Shawn expects a return of 10% from this investment. a. At the offered price, what is the exact YTM of the bond?. b. What is the value of the bond? 6. FTG's P1,000 par value bonds currently sell for P798.50. The coupon rate is 10% paid quarterly. If the bonds have five years before maturity, what is the approximate YTM?
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Effect Of Interest Rate
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS