A $1,000, 12 year bond carries a 3.5% coupon. If the prevailing market rate on the date of purchase is 4.5% compounded semiannually, what is the purchase price of the bond? Multiple Choice $1,254 70 $947.93 $1097.30

Q: A 10-year bond with a par value of $1,000 has a 11.4 percent annual coupon. The bond currently sells…

A: It is a two-stage problem. The first stage involves calculating yield to maturity and the second…

Q: An investor purchases a zero coupon bond with 18 years to maturity at a price of $375.04. The bond…

A: Yield to maturity can be calculated by following function in excel=RATE (nper, pmt, pv, [fv],…

Q: . If the bond is priced at ​$1,150​, the current yield is nothing​%.

A: Current yield = annual coupon/current price Yield to maturity is the internal rate of return offered…

Q: A $1,000 10% ten-year bond has semiannual coupons. It is purchased new at $880 and is redeemable at…

A: ytm = * 100where ,ytm = effective yield rate per coupon period.Interest = coupon amountRV =…

Q: An investor purchases a zero coupon bond with 13 years to maturity at a price of $536.47. The bond…

A: Compound = Semiannually = 2Time to Maturity = t = 13 * 2 = 26Current Price of Bond = pv =…

Q: A 25-year, $1,000 par value bond has a 9.0% annual payment coupon. The bond currently sells for…

A: Bonds refer to instruments that are issued by a company to raise debt capital from non-traditional…

Q: what will the price be 4 years from now? a $935.27 b. $936.94 с. $938.61 d. $940.43 e. $975.84

A: Bonds can trade at a premium, at par, or at a discount, depending on the market conditions for…

Q: A 4% Home Depot bond with a face value of $1,000, semiannual coupon payments, and 25 years to…

A: A bond pays regular periodic coupons over the maturity of the bond and pays par value at the end of…

Q: A bond issued on February 1, 2004 with face value of $37000 has semiannual coupons of 5%, and can be…

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

Q: A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current…

A: We are given the following data -Coupon rate (semi-annual)6%Coupon frequency2Years to maturity4Face…

Q: A bond with 12 years to maturity and a semiannual coupon rate of 7.64 percent has a current yield of…

A: Bond price refers to the current market value of a bond. It is determined by factors such as…

Q: Given the following information, what is the coupon rate of the bond? Years to maturity: 12 Par…

A: Compound = n = Semiannually = 2Time = t = 12 * 2 = 24Face Value = fv = $1000Interest rate = r = 10 /…

Q: What is the price of a 20-year bond with a FV of $1,000 that pays a 6% coupon (semi-annually)? The…

A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Q: $1,000. What is the change in the price of this bond if the market yield to maturity rises to 5.7…

A: The bond price is the present value of all future cash flows, discounted at the bond's yield to…

Q: 13-year bond with a face value of $5000 is redeemable at par and earns interest at j-9%. If the…

A: Bonds are a kind of loan in which interest is paid each period and the par value of the bond is paid…

Q: A four-year bond has an 6 percent coupon rate and a face value of $1,000. If the current price of…

A: Yield to maturity is the percentage of return a bond can generate with the periodic and maturity…

Q: A 4.30 percent coupon bond with 14 years left to maturity is offered for sale at $943.22. What yield…

A: Yield to maturity is the term used to describe the internal rate of return that an investor receives…

Q: A company issues a callable (at par) 20-year, 5% coupon bond with annual coupon payments. The bond…

A: Bond period = 20 years Coupon rate = 5% Bond price = $103 per $100 face value Callable period = In…

Q: A bond has a yield to maturity (YTM) of 5%, with a maturity of 30 years, the coupon payment is $25…

A: SEMI ANNUAL COMPOUNDING       Yield to maturity Years (30*2) 60 coupon amount (PMT)  25 Face…

Q: A bond has a par value of $1,000, a current yield of 6.63 percent, and semiannual coupon payments.…

A: Par value = $1,000Current yield = 6.63 percentBond quoted = 97.66The current yield is the annual…

Q: The market price of a three-year 4% annual-coupon bond is 946.54. If the YTM remains unchanged after…

A: Return from Bond can be denoted by Bond Yield percentage. Bond yield percentage is the rate of…

Q: A four-year bond has an 4 percent coupon rate and a face value of $1,000. If the current price of…

A: Time = t = 4 YearsCoupon rate = c = 4%Face Value = fv = $1000Current Price of Bond = pv = $757.01

Q: A 6.25 percent coupon bond with 19 years left to maturity is offered for sale at $1,095.25. What…

A: Yield to maturity (YTM) is the rate which an investor earns when the bond is held till its maturity.

Q: A 15-year, 6 percent coupon bond pays interest annually. The bond has a face value of $1,000. What…

A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…

Q: A 25-year, $1,000 par value bond has a 9.0% annual payment coupon. The bond currently sells for…

A: Variables in the question:Par value=$1000Annual coupon rate=9%N=25 yearCurrent market…

Q: The bond has a coupon rate of 6.47 percent, it makes semiannual payments, and there are 4 months to…

A: We can determine the invoice price of the bond using the formulas below:

Q: A R1,000 par value bond makes annual coupon payment of R55. If it offers a yield to maturity of 5.5…

A: We are given  Par value=1000 Coupon payment=55 Yield to maturity=5.5% We have to calculate the price…

Q: A 25-year, $1,000 par value bond has a 9.0% annual payment coupon. The bond currently sells for…

A: Bonds are debt securities issued by governments, municipalities or companies to raise money. They…

Q: A R1,000 par value bond makes annual coupon payment of R55. If it offers a yield to maturity of 5.5…

A: Price of bond depends on the coupon rate and yield on bond and maturity period of the bond. Discount…

Q: Compute the price of a $ 9,349 par value, 13 percent coupon consol, or perpetual bond (i.e., coupon…

A: A perpetual bond refers to that bond which pays interest forever i.e. it keeps on paying interest…

Q: Calculate P

A: Present value is the current worth of future payments at given rate of return.

Q: Calculate P

A: The price of the bond is the amount that an investor is ready to pay and the seller is ready to take…

Q: A 14-year zero-coupon bond was issued with a $1,000 face value to yield 9%. What is the market value…

A: Bond- Bonds are fixed-income securities. They are debt securities issued by banks, corporations and…

Q: An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest paid…

A: Price of bond is present value of the coupon payments and the present value of par value of bond…

Q: what will the price be 5 years from now?

A: Price of the bond is the PV of all future coupons and par value discounted at YTM. First, let us…

Q: A $1,000 10% ten-year bond has semiannual coupons. It is purchased new at $880 and is redeemable at…

A: ytm = Interest + RV - NPnRV +NP2 * 100 where , ytm = effective yield rate per coupon period.…

Q: ro coupon bond with a face value of $1,000 is issued with an initial price of $435.50. The bond…

A: Zero coupon bonds are bonds which do not pay any coupon payment but pay par value on maturity of…

Q: A 25-year, $1,000 par value bond has an 8.5% annual coupon. The bond currently sells for $1,175. If…

A: Yield to maturity refers to the expected rate of return that an investor expects from the investment…

Q: Grand Adventure Properties offers a 7 percent coupon bond with annual payments. The yield to…

A: The annual coupon payment on bond is calculated below

Q: A coupon bond has the following characteristics: Purchase Price= 9800$ Annual Bond Rate= 7%…

A: Introduction: Interest amount: Interest amount is charged on the principal amount. Interest is…

Q: A(n) 9.0%, 20-year bond has a par value of $1.000 and a call price of $1,150. (The bond's first call…

A: If YTC<YTM then the bond is likely to be called whereas if YTM<YTC then bond will not be…

Q: Consider an 8-year, 4% quarterly coupon bond with $1,000 face value trading at $922. Which formula…

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

Q: A $1,000, 6.5% coupon bond has 192 years remaining until maturity. Calculate the bond discount if…

A: Bond discount is the amount by which market price of bond is lower than principal amount due at…

Q: A 4.70 percent coupon bond with 15 years left to maturity is offered for sale at $953.91. What yield…

A: Yield to maturity is a discount rate that equates the present value of cash outflow with the present…

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like: