Today is 1 July, 2022, Georg plans to purchase acorporate bond with a coupon rate of 2 1.25%p.a. and a face value of $100. This corporate bondmatures at par. Its maturity date is 1 January, 2025.WIThe yield rate is assumed to be 2 15.8% p.a.,Assume that this corporate bond has a 8% chanceof default in any six-month period during its term.Assume, also, that, if default occurs, Georg willreceive no further payments at all. CalculateGeorg's purchase price. Round your answer tothree decimal places.a.S72.957b.S70.676C.$47.051d.$40.650

Concept Bond Valuation Face Value of Bond 100 Coupon Bond 1.25% Bond Yield 15.80%…

day corporate bond with a coupon rate of 2= 1.25% p.a. and a face value of $100. This corporate bo matures at par. Its maturity date is 1 January, 20 The yield rate is assumed to be /2 15.8% p.a, Assume that this corporate bond has a 8% chan of default in any six-month period during its terr Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to

day corporate bond with a coupon rate of 2= 1.25% p.a. and a face value of $100. This corporate bo matures at par. Its maturity date is 1 January, 20 The yield rate is assumed to be /2 15.8% p.a, Assume that this corporate bond has a 8% chan of default in any six-month period during its terr Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 1.8% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j2 = 11.9% p.a. Assume that this corporate bond has a 5% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to three decimal places. O a. O b. $79.790 O c. $61.241 O d. $55.718 a. $78.509
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