Question
You are considering purchasing a bond with the following characteristics: par value $1000 coupon rate 6% per year payment schedule semiannual (June 15, December 15)
You are considering purchasing a bond with the following characteristics: par value $1000 coupon rate 6% per year payment schedule semiannual (June 15, December 15) maturity date December 15, 2043 required rate of return 8% per year current market price 92.5%
What is the dollar amount of the bond's semiannual coupon payments?
What is the dollar amount of the bond's current market price?
How many coupon payments are remaining on this bond?
Using the Discounted Cash Flow Method, what is the bonds value?
Using the Discounted Cash Flow Method what is the bond's annual expected return (yield-to-maturity)?
Based on your answer to part D should you invest in this bond? Why or why not?
Based on your answer to part E should you invest in the bond? Why or why not?
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Financial Accounting Essentials You Always Wanted To Know Self Learning Management Series
Authors: Vibrant Publishers , Kalpesh Ashar
5th Edition
1636510973, 978-1636510972
