FZero-coupon bond Addison Company will issue a zero-coupon bond this coming month The bond's projected yield is 5% If the par value is $1,000, what is the bond's price using a semiannual conventionna the maturity is 20 yearsb. the maturty is 40 years?c. the matunty is 50 years?d. the matury is 90 years?a. What is the price of the bond using a semiannual convention if the maturity is 20 years?(Round to the nearest cent)

A bond is a kind of debt securities issued by governments and private companies to raise funds from…

Zero-coupon bond Addson Company will issue a zero-coupon bond this coming month The bond's projected yeld K7 a the malurity is 20 years? b. Per is 40 years? che maturity is 50 years What is the price of the bond using a semiannual convention if the maturity is 20 years? (Round to the nearest cent pace is $1,000, what is the bond's price using a semannual convention

Zero-coupon bond Addson Company will issue a zero-coupon bond this coming month The bond's projected yeld K7 a the malurity is 20 years? b. Per is 40 years? che maturity is 50 years What is the price of the bond using a semiannual convention if the maturity is 20 years? (Round to the nearest cent pace is $1,000, what is the bond's price using a semannual convention

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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A. you are offered to buy a 4 year coupon bond in the beginning of its 7th month on its third year for $963.94. its face value is $1,000 and its coupon rate is 5.172% per annum, with coupon paid at the end of each quarter . government bond rate now is 6.9%. a. is $963.94 a good price for you to buy it or not ? what is the fair price for the bond ? b. what is the yield if you buy at the price that you have been offered ? c. if the government bond rate suddenly goes down to 4.7%, what will be the fair value of the bond ? B. the company just paid $1.48 annual dividend and announce the plns to pay $1.54 next year . the dividend growthrate is expected to remain constant at the current level for the following 4 years and then settle at 3% per year , if you are planning to buy this stock in 2 years time, how much would you expect to pay for it if the required rate of return is 7% at the time of your purchase ? ( use two deciaml rounding )
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is a bond that is Sold how at a A Zero Coupon discount and will pay 1ts Cace value at some time in the future when it matures - no inlerest pay.ments are made . A 2ero Coupon bond with a Cace value of 23000 matures in 13 years. What should the bond be Sold for now if its rale of return is to be bi6 lo Compounded semiannually? A fair price to buy the bond at would be
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