A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 10 percent? Use Appendix B andAppendix D to answer the question. Round your answer to the nearest dollar. $ What would be the price if comparable debt yields 10 percent and the bond matures after four years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ Why are the prices different in a and b? The price of the bond in a is -Select-lessgreaterItem 3 than the price of the bond in b as the principal payment of the bond in a is -Select-further outcloserItem 4 than the principal payment of the bond in b (in time).
A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays interest annually.
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What would be the
bond's price if comparable debt yields 10 percent? Use Appendix B andAppendix D to answer the question. Round your answer to the nearest dollar.$
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What would be the price if comparable debt yields 10 percent and the bond matures after four years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.
$
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Why are the prices different in a and b?
The price of the bond in a is -Select-lessgreaterItem 3 than the price of the bond in b as the principal payment of the bond in a is -Select-further outcloserItem 4 than the principal payment of the bond in b (in time). -
What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places.
The bond matures after eight years:
CY: %
YTM: %The bond matures after four years:
CY: %
YTM: %
Since you have posted a question with multiple sub-parts, we will solve the first three subparts for you. To get the remaining sub-part solved please repost the complete question and mention the sub-parts to be solved
The price of the bonds can be determined by using an appropriate discount rate for a given number of years.
We will be using the PVIFand PVIFA factors to determine the current price of the bonds
1. bond's price if comparable debt yields 10 percent is $893
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