Question
1. One of the Englands largest corporation, who own the hair salon, British Hairways just expanded operations into the United States. At present, the firm
1.
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One of the Englands largest corporation, who own the hair salon, British Hairways just expanded operations into the United States. At present, the firm has a 30 year, $10,000 par value bond outstanding, with a coupon rate of 4.3% percent paid semiannually and 15 years to maturity. The yield to maturity on this bond is 5.2 percent.
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What is the current value of the bond?
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Once you have calculated the Present Value or the current price of the bond, what would be the Current Yield on this bond?
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Is it selling at a discount, par, or premium?
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What is the difference between the concepts of Yield to Maturity, Current Yield, and Coupon Rate? Please compare the three rate
Further Instructions:
Please include a time line, filling in or including all given and to be solved variables which are components of the bond, such as N, Semi-Annual Time Periods (as long as you indicate semi-annual is the frequency), I/Y, Coupon PMT, FV (Face Value at Maturity or M), (where the Present Value equals the current bond price) PV is variable to be solved for, so PV?
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