uppose a bond has a coupon rate of 9.5%, a remaining maturity of 15 years, and a face value of N1,000. If the yield-to-maturity on this bond is 13%, what is the current price (value) of this bond? The bond pays coupons monthly.

uppose a bond has a coupon rate of 9.5%, a remaining maturity of 15 years, and a face value of N1,000. If the yield-to-maturity on this bond is 13%, what is the current price (value) of this bond? The bond pays coupons monthly.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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Question

Suppose a bond has a coupon rate of 9.5%, a remaining maturity of 15 years, and a face value of N1,000. If the yield-to-maturity on this bond is 13%, what is the current price (value) of this bond? The bond pays coupons monthly.

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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