Question
TESLA is planning to issue bonds with the following characteristics: Par: 1000 Time to maturity 20 years Coupon rate 7% Annual payments The expected YTM
TESLA is planning to issue bonds with the following characteristics:
Par: 1000
Time to maturity 20 years
Coupon rate 7%
Annual payments
The expected YTM is 6%, what is the price of the bond?
If instead of 7% coupon rate with annual payments, the decision is to make 7% semiannual payments, what would the price of the bond be?
After 5 years, what would be the price for the TESLA bonds (annual and semiannual coupons) if the interest rate increases to 7%.
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Money Banking And Financial Markets
Authors: Stephen Cecchetti, Kermit Schoenholtz
3rd Edition
007337590X, 9780073375908
