A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with semi-annual payment, and yield to maturity (YTM) of 3.33%. Let’s assume that in 5 years, the YTM on this increases to 5.51%. What will the $price be for this bond in 5 years?

A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with semi-annual payment, and yield to maturity (YTM) of 3.33%. Let’s assume that in 5 years, the YTM on this increases to 5.51%. What will the $price be for this bond in 5 years?

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

Related questions

Q: What is the approximate yield over the 4 year window on a 10% coupon bond, $1000 par, which is…

A: Step 1: Calculate the value of the bond after 4 years:The value of the bond is computed using the…

Q: What is the price of a 5-year, 8.4% coupon rate, $1,000 face value bond that pays interest…

A: Using Financial Calculator

Q: what will its price be at that time

A: To calculate the bond's price one year from now, we can consider the information provided:Face…

Q: You are considering purchasing a bond that has a $1,000 par value, 5% coupon paid semi-annually, 20…

A: Bond price refers to the market value of a bond, which is determined by factors such as the bond's…

Q: A 10-year bond with a face value of $10,000 pays a 5% annual coupon and has a yield (annual interest…

A: Solution:- Bond price means the price at which a bond is trading in the market. It is the summation…

Q: Assume that a company issued a bond with $1000 face value, 10% coupon rate, 20 years maturity. If…

A: Face value =$1000 Coupon rate =10% Coupon payment =$100 Time =20 years YTM =8% So, present value of…

Q: Assume that a 10-year bond pays a $32 coupon every six months and will mature for $1,000. Also…

A: Face value of Bond at Maturity (FV)$1,000Semi-annual coupon payment $32.00Bond Period10.00Payment…

Q: A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for…

A: Yield to maturity: Yield to maturity is 9.281%

Q: On the issue date, you bought a 30-year maturity, 5% semi-annual coupon bond. The bond then sold at…

A: Calculation of realized return: Answer: Realized rate of return is 9.30%

Q: Consider a corporate bond with a $1000 face value, 10% coupon with semiannual coupon payments, 8…

A: In bonds there are two prices One is clean price that is price of bond without accrued coupon…

Q: The

A: Capital gains yield =p1-p0/p0 Po=original purchase price of security P1=current market price of…

Q: A 15 year, $1000 par value bond has a coupon rate of 17% with semiannual payments. Your required…

A: The maximum amount to pay for the bond will be the value of the bond. The value of the bond can be…

Q: The semi-annual bonds of Delta Company have a coupon rate of 6%, a Yield to Maturity of 8%, a par…

A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…

Q: A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095.…

A: Bond is one of debt security which is issue by corporates or government for financing. Bonds provide…

Q: A companies corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5%…

A: Given:

Q: A bond has a $1000 par value, 12 years to maturity and an 8% annual coupon and sells for $980. What…

A: Bond A bond is a financial security where the bond holder receives periodic series of coupon…

Q: We have an 8% coupon, 30-year maturity bond with a par value of $1000 paying 60 semi-annual coupon…

A: Bond value is calculated by sum of present value of cash flows. Bond value = Present value of…

Q: The

A: Given in question Face value $1,000 Call price $ 1,070 Call year 5 Coupon rate 11% semi annual…

Q: What is your total holding period return over 1-year on a bond that pays a 4.5% annual coupon,…

A: The price of a bond is equal to the sum of the present value of coupon payments and the present…

Q: Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the…

A: Yield to maturity is the rate of yield received when a bond is kept till maturity. It is total…

Q: A 5-year bond has a face value of $1,000, matures in 5 years, pays interest semi-annually, and has a…

A: The dirty price of a bond refers to the total price at which the bond is bought or sold in the…

Q: A bond with 14 years to maturity and a coupon rate of 5% has a par, or face, value of $19,000.…

A: A bond is a kind of debt security issued by the government and private companies for raising funds…

Q: What must be the price of a $2,000 bond with a 5.7% coupon rate, annual coupons, and 30 years to…

A: The price of a bond consists present value of all future coupon payments and the redemption…

Q: A 100-year corporate bond has a coupon rate of 5% with semi - annual payments. If the current value…

A: Yield to Maturity (YTM):A financial indicator known as Yield to Maturity (YTM) evaluates the…

Q: Your company currently has $ 1,000 par, 5.75 % coupon bonds with 10 years to maturity and a price of…

A: A bond is a capital market security that offers a fixed periodic income to the investors in form of…

Q: A $1,000 face value bond has a 3% annual coupon rate and 12 years to maturity. If the yield to…

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

Q: On the issue date, you bought a 15-year maturity, 6.55% semi-annual coupon bond. The bond then sold…

A: A bond refers to an instrument the issuing organization uses to raise debt capital from…

Q: A bond has a face value of $1,000, has 5 years until maturity, and an annual coupon rate of 7%? It…

A: Bond price refers to the price at which the bonds are being traded in the market by the investor for…

Q: uppose a bond has a coupon rate of 9.5%, a remaining maturity of 15 years, and a face value of…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: What is the yield to maturity on a bond that has a price of $1,700 and a coupon rate of 12% annually…

A: Information provided: Price = $1700 Future Value = $1000 Coupon rate = 12% Coupon payment = 120…

Q: A bond offers a $50 coupon, has a face value of $1,000, and 4 years to maturity. If the interest…

Q: A bond has 10 years until maturity, a coupon rate of 8.1%, and sells for $1,190. Interest is paid…

A: a. Calculation of bond price:Formula used:

Q: Consider a 5-year, semi-annual coupon bond with a price of $110 and a coupon rate of 6%. The face…

A: All the characteristics of a bond are known. It's yield is to be calculated. Subsequently, the…

Q: What is the most we should pay for a bond with a par value of $1000, coupon rate of 8.8% paid semi…

A: Maturity value or par value (Z) = $1000 Semiannual coupon amount (C) = $44 (i.e. $1000 * 0.088 / 2)…

Q: Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years and…

A: Bonds are debt instruments issued by companies. The issuing company pays periodic interest or…

Q: Consider a bond paying an annual coupon of $70 with a face value of $1,000. Calculate the yield to…

A: using financial calculator, N(time to maturity) =18 PV (Price of bond) = -1150 FMT (annual Coupon) =…

Q: A bond has 10 years until maturity, a coupon rate of 8.9%, and sells for $1,110. Interest is paid…

A: Compound = Annually = 1Time = nper = 10 YearsCoupon Rate = 8.9%Selling Price of Bond = pv= $1110Face…

Q: has a par value of $100, a coupon rate of 10.75% and matures in 5 years. If interest is paid…

A: The given problem can be solved using PV function in excel. PV function computes current price for…

Q: Bond X has 20 years to maturity, a 8% annual coupon, and a R 1,000 face value. The required rate of…

A: We have to find the price of the bond to be paid now, so as to get a target return on it, by holding…

Q: Bond X has 20 years to maturity, a 8% annual coupon, and a R 1,000 face value. The required rate of…

A: Price of the bond 6 years from today is calculated when the maturity is 20 years at an yield to…

Q: What is the price of a 3 year , 8.2% coupon rate ,$1000 face value bond that pays interest quarterly…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: Consider a 25-year bond with a face value of $1,000 that has a. What is the coupon payment for this…

A: The bond makes semiannual coupon payments, so there will be 50 coupon payments over the 25-year…

Q: Consider a coupon bond with a 5% coupon rate. It will mature in 2 years and its yield to maturity is…

A: Fv = 100 (Assumed) Coupon rate = 5% , i.e. Coupon value = 100*5% = $5 Yield to maturity = 10% if…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with semi-annual payment, and yield to maturity (YTM) of 4.32%. Let’s assume that in 5 years, the YTM on this increases to 5.13%. What will the $price be for this bond in 5 years?
Consider a bond that has a face value of $1,000. The bond has a maturity of 25 years and pays coupons of 5.5% per annum. If the bond's required rate of return is 8.0% per annum nominal, and coupons are received semi-annually, what is the current market price of the bond?
Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.6% when you purchased and sold the bond, A)What cash flows will you pay and receive from your investment in the bond per $100 face value? B)What is the annual rate of return of your investment?
A newly issued bond with 1 year to maturity has a price of $1,000, which equals its face value. The coupon rate is 15% and the probability of default in 1 year is 35%. The bond’s payoff in default will be 65% of its face value. a. Calculate the bond’s expected return. b. Use a data table to show the expected return as a function of the recovery percentage and the price of the bond. Please show how you got part B using all functions.
You have a 30-year Treasury of $1,000 face value that pays 4.4% coupons yearly and has 7.5 years left to maturity. The Yield to Maturity (YTM) of this bond is 5.2% per annum. What is its price? Remember, by convention coupons are assumed to be paid twice a year unless otherwise specified.
What is the current yield of a bond with a 5.2% coupon paying interest annually, 7 years until maturity, a face value of $1,000, and a YTM of 6.5%?
Consider a 30-year Bond with $1,000 face value, which offers 10% annual coupon, paid once a year.Assume that interest rates, hence YTM (Yield to Maturity) changed from 6% to 7%. What is the duration of the Bond in years? Enter your answer in the following format: 12.34Hint1: Answer is between 10.24 and 12.77Hint2: Duration = (new bond price - old bond price) * (-100) / old bond price
Assume that the issue will have a coupon rate of 5% with a 15 year maturity. Assume this are semi-annual coupon bonds and each have a face value of $1,000 and the required rates of return for similar bonds in the market is 4.5%. What would be the issuing price of these bonds?
a) A bond has 15 years left to maturity. The annual coupon rate is 9%, and face value is $1,000. If the YTM = 12%, what is the bond price? b) An annual coupon bond has coupon payment = $500, YTM =8%, and maturity = 5 years. If the price ofthe bond is $9,400, what must be the face value? c)A bond has 15 years left to maturity. The semi-annual coupon rate is 9%, and face value is $1,000. If the YTM = 12%, what is the bond price? for all 3 parts please show all calculations via excel, and how you got them in excel (formulas). thanks.
What is the yield-to-maturity of a bond with a coupon rate of 9.0%, par value of $2000, 7 years until maturity, and a value of $987.33 if coupons are paid annually with the next one due in one year?
Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.9%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw 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 $ (Round to the nearest cent.)

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

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…

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

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

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…

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