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ira [324]
3 years ago
5

Suppose a​ seven-year, $ 1 comma 000 bond with a 7.8 % coupon rate and semiannual coupons is trading with a yield to maturity of

6.50 %.If the yield to maturity of the bond rises to 7.20 % ​(APR with semiannual​ compounding), what price will the bond trade​ for?
Business
1 answer:
n200080 [17]3 years ago
4 0

Answer:

The price of the bond is  1,072.19  

Explanation:

The price at which the bond trades for can be computed using the pv formula in excel which tries to discount to present value all the cash inflows receivable from the bond into today's present worth.

=-pv(rate,nper,pmt,fv)

rate is the yield to maturity of 6.50% divided by 2 since the bond pays interest semi-annually i.e 3.25%

nper is the number of coupon payments the bond would pay which is 7 years multiplied by 2 i.e 14

pmt is the semi-annual interest of the bond which is $1000*7.8%/2=$39

the fv is the face value of the bond of $1000

=-pv(6.5%/2,14,39,1000)=$1,072.19  

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Answer:

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Keisler's has cost of goods sold of $11,518, interest expense of $315, dividends of $420, depreciation of $811, and a change in
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3 years ago
Prior to the closing, one final inspection should take place. This is also known as the final what?
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8 0
1 year ago
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Alenkasestr [34]
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3 years ago
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Julli [10]

Answer:

Explanation:

1.

Direct labour hours work during the period:

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Product W=18,100 units × 3 hours=54,300 hours

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2.

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