A $1,000 corporate bond has a maturity date 20 years from now and a coupon rate of 6 percent paid annually. Calculate the value of the bond if the required rate of return is a) 4% b) 6% c) 8%
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A $1,000 corporate bond has a maturity date 20 years from now and a coupon rate of 6 percent paid annually. Calculate the
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- A bond has 10 years until maturity, a coupon rate of 8.9%, and sells for $1,110. Interest is paid annually. (Assume a face value of $1,000.) What will be the rate of return on the bond?A 5-year treasury bond with a coupon rate of 8% has a face value of $1,000. What is the semi-annual interest payment?Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.5%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timeline
- A 10-year bond with a face value of $1,000 has a coupon rate of 9.0%, with semiannual payments. a. What is the coupon payment for this bond? b. Enter the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ every six months. (Round to the nearest cent.)A $1,000 corporate bond has a maturity date 20 years from now and a coupon rate of 6 percent paid annually. Calculate the value of the bond if the required rate of return is a) 4% b) 6% c) 8%. Strip the bond into an interest only bond and a face value only bond. That is, create a bond that consists only of the coupon interest payments and one that consists only of the face value. Calculate the value of each of these new bonds with required rates of return of a) 4% b) 6% c) 8%. Which bond has more interest rate risk? Which bond has more default risk? Now say that instead of annual coupon payments, the corporation makes payments every six months. Recalculate the value of your stripped bonds. Explain the results.Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.9%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ (Round to the nearest cent.)
- Calculate the value of a $1,000 bond which has 10 years until maturity and pays annual interest at an annual coupon rate of 10 percent. The required return on similar-risk bonds is 12 percent.As with most bonds, consider a bond with a face value of $1,000. The bond's maturity is 18 years, the coupon rate is 6% paid annually, and the market yield (discount rate) is 13%. What should be the estimated value of this bond in one year?The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature in 7 years. Your required rate of return for such an investment is 10% annually. 1. How much should you pay for a $1,000 ARA Corporation bond? Use the bond equation formula.
- A corporate bond has a face value of $1 000, a coupon rate of interest of 10.5% per annum, payable semi-annually, and 20 years remaining to maturity. The market interest rate for bonds of similar risk and maturity is currently 8.5% per annum.Required:i. What is the coupon payment of the bond? ii. What is the present value of the bond? iii. If the coupon payment is payable annual (based on the same information), what is the value of the bond?A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. a) If the bond has a yeild to maturity of 9% 1 year from now, what will its price be at that time? b) What will be the rate of return on the bond? c) Now assume that interest is paid semannually. What will be the rate of return on the bond? d) If the inflation rate during the year is 3% what is the real rate of return on the bond?