✰ Henderson's credit rating is BBB, and its outstanding 8% coupon bond have 15 years remaining until maturity. What is a fair price for these bonds if the credit spread for BBB bonds over Treasuries is 5.9%, and the yield on comparable Treasuries is 2.8%? Use a par value of $1,000 and assume semi-annual coupon payments. Enter your answer as a positive number rounded to the nearest penny.
✰ Henderson's credit rating is BBB, and its outstanding 8% coupon bond have 15 years remaining until maturity. What is a fair price for these bonds if the credit spread for BBB bonds over Treasuries is 5.9%, and the yield on comparable Treasuries is 2.8%? Use a par value of $1,000 and assume semi-annual coupon payments. Enter your answer as a positive number rounded to the nearest penny.
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
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Transcribed Image Text:Henderson's credit rating is BBB, and its outstanding 8% coupon bond have 15 years remaining until maturity. What is a fair price for these bonds if the credit spread
for BBB bonds over Treasuries is 5.9%, and the yield on comparable Treasuries is 2.8% ? Use a par value of $1,000 and assume semi-annual coupon payments. Enter
your answer as a positive number rounded to the nearest penny.
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