Answered step by step
Verified Expert Solution
Question
1 Approved Answer
To finance a new Fab in Arizona, TSM issued an 8-year, 5.75% coupon bond with semi-annual coupon payments. The current YTM is 6.5%. What
To finance a new Fab in Arizona, TSM issued an 8-year, 5.75% coupon bond with semi-annual coupon payments. The current YTM is 6.5%. What is the duration of this bond and how much will the price change if YTM goes up by 1% using the duration approximation method you've learned in this class?
Step by Step Solution
★★★★★
3.38 Rating (154 Votes )
There are 3 Steps involved in it
Step: 1
To calculate the duration of a bond we need to use the formula Duration 1 YTM1 C11 YTM C21 YTM2 Cn1 ...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals of Corporate Finance
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
12th edition
007353062X, 73530628, 1260153592, 1260153590, 978-1260153590
