Question
A Samsung bond has $1000 face value and matures in 3 years. The coupon rate is 11% with semi-annual coupon payment. The stated annual required
A Samsung bond has $1000 face value and matures in 3 years. The coupon rate is 11% with semi-annual coupon payment. The stated annual required rate of return is 12% with semi-annual
compounding.
(a) What should be the current price of this Samsung bond? (10 marks)
(b) Suppose Samsung decides to issue another bond with a face value of $1000 and it matures in 1
year. The coupon rate is 10% with semi-annual coupon payment. Samsung is able to sell the bond
at $950. What is the yield to maturity for this bond?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
14th edition
1337090581, 978-1337090582
