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What would you pay for a $65,000 debenture bond that matures in 10 years and pays $9,100 a year in interest if you wanted to earn a yield of: (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What would you pay for a $65,000 debenture bond that matures in 10 years and pays $9,100 a year in interest if you wanted to earn a yield of: (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Essentials Of Investments
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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Click here to view the factor table.

https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf

### Bond Pricing Exercise **Scenario:** Determine the price you would pay for a $65,000 debenture bond with the following conditions: - Maturity Period: 10 years - Annual Interest Payment: $9,100 - Desired Yield: **Instructions:** To calculate the appropriate purchase price for the bond, use the specified yield rate and factor table values ensuring calculations are made to five decimal places as shown in the factor table. After calculations, round your final answer to zero decimal places (e.g., 458,581). **Steps:** 1. **Access the Factor Table:** - Click on the provided link: “Click here to view the factor table.” 2. **Calculate for 14% Yield:** - **14% Yield:** - Determine the amount to pay for the bond to achieve a 14% annual yield. - **Input Field:** - Enter the calculated amount to pay in the box provided. This exercise will guide you in understanding bond valuations based on differing yield expectations and financial objectives.
Transcribed Image Text:### Bond Pricing Exercise **Scenario:** Determine the price you would pay for a $65,000 debenture bond with the following conditions: - Maturity Period: 10 years - Annual Interest Payment: $9,100 - Desired Yield: **Instructions:** To calculate the appropriate purchase price for the bond, use the specified yield rate and factor table values ensuring calculations are made to five decimal places as shown in the factor table. After calculations, round your final answer to zero decimal places (e.g., 458,581). **Steps:** 1. **Access the Factor Table:** - Click on the provided link: “Click here to view the factor table.” 2. **Calculate for 14% Yield:** - **14% Yield:** - Determine the amount to pay for the bond to achieve a 14% annual yield. - **Input Field:** - Enter the calculated amount to pay in the box provided. This exercise will guide you in understanding bond valuations based on differing yield expectations and financial objectives.
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