You are currently considering buying an Ecolab corporate bond. The bond has the following characteristics:
The current year is 2016
Par value of bond $1,000
Coupon rate 8%
Bond was issued in 2011
Bond will mature in 2041
Payments are made semi-annually
Current market interest rate 6%
Question:
What is this bond's current price?
What is this bond's current yield?
What is this bond's yield - to - maturity?
If the original buyer purchased this bond at par at issue, and now sells it at it's current
price - what will be the total return (in %).
Why would investors choose bonds over stocks?
What variables impact the price (value) of a bond?
How do investors evaluate the risk of a bond?
What are the major differences between corporate bonds and U.S. Treasury Bonds?