a) A 20-year bond with a face value of $1,000 will mature in 8 years. The...
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a) A 20-year bond with a face value of $1,000 will mature in 8 years. The bond pays semi-annual coupons at 5% p.a. compounding half-yearly. Mia wants to purchase the bond at a price which gives her a yield to maturity of 6% p.a. compounding half-yearly. Calculate the maximum price Mia should pay for the bond. (Round your answer to the nearest cent) (3 marks) a) A 20-year bond with a face value of $1,000 will mature in 8 years. The bond pays semi-annual coupons at 5% p.a. compounding half-yearly. Mia wants to purchase the bond at a price which gives her a yield to maturity of 6% p.a. compounding half-yearly. Calculate the maximum price Mia should pay for the bond. (Round your answer to the nearest cent) (3 marks)
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Calculation of the maximum price Mia should pay for the bond Formula Bond price Interest x 1 1 YT... View the full answer
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Accounting Tools for business decision making
ISBN: 978-0470095461
4th Edition
Authors: kimmel, weygandt, kieso
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