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RSB [31]
3 years ago
13

Union Local School District has bonds outstanding with a coupon rate of 4.5 percent paid semiannually and 20 years to maturity.

The yield to maturity on these bonds is 3.8 percent and the bonds have a par value of $10,000. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
2 answers:
MArishka [77]3 years ago
6 0

Answer:

$10,974.45

Explanation:

coupon rate 4.5%, semiannual = 2.25%

20 years until maturity = 40 periods

market rate 3.8%, semiannual = 1.9%

par value $10,000

market price of the bonds = PV of par value + PV of coupon payments

PV of par value = $10,000 / (1 + 1.9%)⁴⁰ = $4,710.13

PV of coupon payments = $225 x 27.84144 (PV annuity factor, 1.9%, 40 periods) = $6,264.32

market value = $4,710.13 + $6,264.32 = $10,974.45

balandron [24]3 years ago
5 0

Answer:

The dollar price of the bond is $10,974.45.

Explanation:

The dollar price of the bond, PV, can be determined as follows :

N = 20 × 2 = 40

PMT = ($10,000 × 4.5%) ÷ 2 = $225

P/YR = 2

YTM = 3.80 %

FV = $10,000

PV = ?

Using a Financial Calculator, the dollar price of the bond, PV is $10,974.45.

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<h3>What is assets?</h3>

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A company's capacity to fulfill its short-term and long-term financial commitments is known as its solvency. One indicator of a company's financial health is its level of solvency, which reveals whether it will be able to continue running its business into the near future. Ratio analysis is a tool investors can use to assess a company's solvency.

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Answer:

why do people feel more compelled to work with a leader who demonstrates responsibility?

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Explanation:

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3 years ago
The first marketing law suggests that to be successful in the market, marketers need to?
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The first marketing law suggests that in order to be successful in the market, the marketers need to understand the customer's demand and identify the brand positioning of the product in the market. Therefore, the option C holds true.

<h3>What is the significance of marketing laws?</h3>

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The incomplete question has been completed below for better reference.

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