A 10-year bond earns interest at 10.2 percent convertible semiannually and has a yield rate of 7.4 percent convertible semiannually. If the book value immediately after the 7th coupon payment is 1071.75 dollars, and the book valueimmediately after the 11th coupon payment is 1019.48 dollars, what is the face value?Note: Don't assume that the face value and redemption value are the same.Answer=dollars.

A 10-year bond earns interest at 10.2 percent convertible semiannually and has a yield rate of 7.4 percent convertib immediately after the 11th coupon payment is 1019.48 dollars, what is the face value? Note: Don't assume that the face value and redemption value are the same. Answer= dollars.

A 10-year bond earns interest at 10.2 percent convertible semiannually and has a yield rate of 7.4 percent convertib immediately after the 11th coupon payment is 1019.48 dollars, what is the face value? Note: Don't assume that the face value and redemption value are the same. Answer= dollars.

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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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

A 10-year bond earns interest at 10.2 percent convertible semiannually and has a yield rate of 7.4 percent convertible semiannually. If the book value immediately after the 7th coupon payment is 1071.75 dollars, and the book value
immediately after the 11th coupon payment is 1019.48 dollars, what is the face value?
Note: Don't assume that the face value and redemption value are the same.
Answer=
dollars.

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