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4) A coupon bond pays this amount every 6 months; $ 30.00 bgs for the number of payments/year; 2 The bond also pays at maturity
4) | A coupon bond pays this amount every 6 months; | $ 30.00 | bgs | ||||||
for the number of payments/year; | 2 | ||||||||
The bond also pays at maturity the par (face) value; | $ 1,000.00 | ||||||||
Number of years until maturity | 15 | ||||||||
The required return of holders of this bond is; | 8.00% | bgs | |||||||
a) | What is the PV of the CFs, or what would be the fair price to purchase this bond? | ||||||||
b) | If the required return of holders of this bond is; | 6.00% | bgs | ||||||
What is the PV of the CFs, or what would be the fair price to purchase this bond? | |||||||||
c) | If the required return of holders of this bond is; | 4.00% | |||||||
What is the PV of the CFs, or what would be the fair price to purchase this bond? | to purchase this bond? | ||||||||
bgs | |||||||||
d) | If the previous bond sells for; | $ (976.00) | |||||||
What must be the yield to maturity for this bond (aka IRR) ? (to nearest b.p.) | 0 |
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