Question
In July 1993, Disney issued a bond with $300,000,000 in face value. The coupon rate was 7.55%, paid semi-annually. The maturity was July 15, 2093.
In July 1993, Disney issued a bond with $300,000,000 in face value.
The coupon rate was 7.55%, paid semi-annually.
The maturity was July 15, 2093. (100 years)
The yield at issuance was 7.55%, so the bond was issued at par.
Assume a $100 par value throughout.
1. Approximate the modified duration (based on semi-annual yields) using the approximation formula.
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
