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A bond has a par value of $1,000, pays $70 semiannually and has a maturity of 15 years. 1) If the bond earns 12%
A bond has a par value of $1,000, pays $70 semiannually and has a maturity of 15 years. 1) If the bond earns 12% per year, what is the price of the bond? Rate Nper PMT FV Type PV 2) What is the yield to maturity for the bond? Nper PMT PV FV Type Rate 53) What would be the bond's price if the rate earned declined to 8% per year? BRate Nper 0 PMT 1 FV 2 Type 3 PV
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Step: 1
To calculate the price of the bond we can use the present value formula PV PMT 1 1 rn r FV 1 rn Where PV Present value or price of the bond PMT Period...
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Step: 2
Step: 3
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Fundamentals Of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
13th Edition
1265553602, 978-1265553609
