What must be the price of a $2,000 bond with a 5.8% coupon rate, annual coupons, and 30 years to maturity if YTM is 9.9% APR?A. $976.40O B. $1,708.70O C. $1,464.60O D. $1,220.50

Price of the bond is the present value of future cashflows

Answered: What must be the price of a $2,000 bond…

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

Problem 1PS

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What is the yield to maturity of a nine-year, $5,000 bond with a 4% coupon rate and semiannual coupons if this bond is currently trading for a price of $4,526? OA. 7.48% B. 5.34% OC. 6.41% D. 2.67%
What is the YTM of a bond with 12 years to maturity, coupon rate of 10% paid annually, par value of $1,000, and a price of $987.25? What is the YTM of a bond with 12 years to maturity, coupon rate of 10% paid SEMIannually, par value of $1,000, and a price of $987.25?
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What must be the price of a $5,000 bond with a 6.5% coupon rate, semiannual coupons, and five years to maturity if it has a yield to maturity of 9% APR? ..... O A. $6,308 B. $3,604 C. $5,407 D. $4,505
Sunnyfax Publishing pays out all its earnings and has a share price of $37.00. In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 14%. If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision? O$45.87 $40.14 $68.81 $57.34
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What must be the price of a $2,000 bond with a 5.8% coupon rate, annual coupons, and 30 years to maturity if YTM is 9.9% APR? A. $976.40 O B. $1,708.70 O C. $1,464.60 O D. $1,220.50