Question
You want to buy a Disney bond with four years until maturity and a coupon rate of 10.25% per year, paid semiannually. FED reports that
You want to buy a Disney bond with four years until maturity and a coupon rate of 10.25% per year, paid semiannually. FED reports that the market interest rate for similar bonds is only 4.1% per half-year. a. Find the bond's price today and 6 months from now after the next coupon is paid. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Current price $ Price after 6 months $ b. What is the total rate of return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Total rate of return % per six months
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