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You have the following bond maturing in 4 years: Face Value = 1.000$; Semiannual dividends = 35$; Annual Interest rate= 5% Compute the PV of
You have the following bond maturing in 4 years:
Face Value = 1.000$;
Semiannual dividends = 35$;
Annual Interest rate= 5%
- Compute the PV of the cash flows?
- What will happen to the bond price if the interest rate decreases to 6%?
- Compute both the duration and the modified duration of the bond?
- Interpret your results in question 3?
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
