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Dewey Cheetham & Howe Accounting firm is considering the purchase of a $1,000 New Haven Municipal Bond. The stated coupon rate is 5%, paid semi-annually
- Dewey Cheetham & Howe Accounting firm is considering the purchase of a $1,000 New Haven Municipal Bond. The stated coupon rate is 5%, paid semi-annually (twice a year). The bond will mature in 20 years. The YTM for similar bonds is 2.5%.
- How much should the market price of the bond be?
- How much is the effective rate?
- For the current year, how much is the current yield?
- For the current year, how much is the capital gains yield?
- What should the market price be if the coupon were paid annually?
- If the current market price of the bond is $1080, find the YTM with the original semi-annual coupon.
- What is the Yield to Call if the bond is callable in 7 years at a 15% premium with the original semi-annual coupon?
- How much should the market price of the bond be?
- How much is the effective rate?
- For the current year, how much is the current yield?
- For the current year, how much is the capital gains yield?
- What should the market price be if the coupon were paid annually?
- If the current market price of the bond is $1080, find the YTM with the original semi-annual coupon.
- What is the Yield to Call if the bond is callable in 7 years at a 15% premium with the original semi-annual coupon?
***using excel formulas**
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