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Company A has a premium bond making semiannual payments. The bond pays an 9 percent coupon, has a YTM of 7 percent, and has 15
Company A has a premium bond making semiannual payments. The bond pays an 9 percent coupon, has a YTM of 7 percent, and has 15 years to maturity. Company B has a discount bond making semiannual payments. This bond pays a 7 percent coupon, has a YTM of 9 percent, and also has 15 years to maturity. If interest rates remain unchanged, what do you expect the price of these bonds to be 1, 6, 11, 13 and 15 years from now?
Price of bond | Company A | Company B |
One year | $ | $ |
6 years | $ | $ |
11 years | $ | $ |
13 years | $ | $ |
15 years | $ | $ |
Round the final answers to 2 decimal places. |
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