Question
Cherry Inc. issues a 4-year default free bond which has a face value of $1 000 and pays a yearly coupon rate of 1000%.Given the
Cherry Inc. issues a 4-year default free bond which has a face value of $1 000 and pays a yearly coupon rate of 1000%.Given the YTM of zero-coupon bonds as below calculate the price of this bond?
| Maturity (years) | 1 | 2 | 3 | 4 | 5 |
| YTM | 3,30% | 3,85% | 4,65% | 5,05% | 5,35% |
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the price of a bond you can use the present value of its cash flows In this case the bo...
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Introduction to Corporate Finance What Companies Do
Authors: John Graham, Scott Smart
3rd edition
9781111532611, 1111222282, 1111532613, 978-1111222284
