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NaturePromo Inc. has just issued 10-year semiannual coupon bonds with a face value of $1,000. The annual coupon rate is 5% and the current yield
NaturePromo Inc. has just issued 10-year semiannual coupon bonds with a face value of $1,000. The annual coupon rate is 5% and the current yield to maturity is 4.5%. (a) What is the company's current price per bond? [Present the formulae, calculations, values of parts and final answer in the table below.] Formulae (or Excel Functions used): Amount of each coupon payment (show calculation): Total number of coupon payments for 10 years (show calculation): Yield to maturity of the bond for each period (show calculation): Current price of the bond (show calculation): (b) Is the bond trading at a premium or discount? Clearly relate your answer to the bond price, coupon rate and yield to maturity relationship
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