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9.1: Bond Valuation Calculate the value of a bond that matures in 8 years and 1,000 SAR par value. The coupon rate is 6% and

9.1: Bond Valuation

Calculate the value of a bond that matures in 8 years and 1,000 SAR par value. The coupon rate is 6% and the market's required yield to maturity is 10%.

DATA

Years

8

Face value

1000

PMT

60

Rate

10%

Problem 9.2: Yield to Maturity

A bond's market price is 950 SAR. It has a 1000 par value, will mature in 10 years, and the coupon rate 8 percent annually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 17 years? What is mature in 6 years?

Problem 9.3: Bond Valuation w/Semiannual Coupon Payment

A bond matures in 15 years with 1,000 SAR par value. The coupon rate is 6% and the market's required yield to maturity is 14%. What would be the value of this bond if it pays the coupon payment semiannually?

Problem 9.4: Bond Valuation w/Zero Coupon Payment

A zero coupon bond matures in 15 years with 1,000 SAR par value. The market's required yield to maturity is 10.5%. What would be the value of this bond?

Problem 9:5: Bondholders Expected Rate of Return

A bond matures in 17 years with 1,000 SAR par value. The coupon rate is 11% and the market price is 1500 SAR. What would be the expected rate of this bond?

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