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Rzqust [24]
3 years ago
11

have an annual coupon rate of 8 percent and a par value of $1,000 and will mature in 20 years. If you require a 7 percent return

, what price would you be willing to pay for a Vanguard bond
Business
1 answer:
ololo11 [35]3 years ago
6 0

Answer:

I will be willing to pay $1,106 for a vanguard bond.

Explanation:

Coupon payment = Par value x Coupon rate

Coupon payment = $1,000 x 8%

Coupon payment = = $80

Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond =$80 x [ ( 1 - ( 1 + 7% )^-20 ) / 7% ] + [ $1,000 / ( 1 + 7% )^20 ]

Price of the Bond = $80 x [ ( 1 - ( 1.07 )^-20 ) / 0.07 ] + [ $1,000 / ( 1.07 )^20 ]

Price of the Bond = $848 + $258

Price of the Bond = $1,106

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The least amount of time for the project to complete would be approximately 5 days, and the resources needed to complete the task would be approximately 7 workers.

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garik1379 [7]

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the question is incomplete .please read below to find the missing content

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Multiple Choice

evaluation

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interest

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Advocacy is the activity of individuals or groups aimed at influencing decisions within political, economic, and social institutions. Advocacy Her group, for example, is a non-profit organization dedicated to helping women who have been victims of domestic violence and are afraid to speak up for themselves.

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brainly.com/question/1086036

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