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Mingming Inc. has a 8 percent coupon bond that makes semiannual coupon payments. It matures in 13.5 years. What is the market price if the
Mingming Inc. has a 8 percent coupon bond that makes semiannual coupon payments. It matures in 13.5 years.
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To calculate the market price of the bond we can use the present value formula for a bonds cash flows The cash flows from the bond consist of the semiannual coupon payments and the face value payment at maturity Given Coupon rate 8 008 Face value 1000 Yield to maturity 1478 01478 Number of years to maturity 135 Semiannual coupon payments 008 1000 2 40 To calculate the market price we need to discount the future cash flows to their present value using the yield to maturity The present value of each cash flow ...
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Financial Accounting an introduction to concepts, methods and uses
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
13th Edition
978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003
