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Masteriza [31]
3 years ago
12

The 4.5 percent bond of JL Motors has a face value of $1,000, a maturity of 7 years, semiannual interest payments, and a yield t

o maturity of 6.23 percent. What is the current market price of the bond
Business
1 answer:
DiKsa [7]3 years ago
5 0

Answer:

<em>The current market price for the bond is $903.05</em>

Explanation:

<em>Steps taken to arrive at the current market price of the bond</em>

<em>Recall PV=present value</em>

<em>face value=$1000</em>

<em>percent bond=4.5,</em>

<em>A semiannual interest payments of 7 years, yielding a maturity rate of=6.23%</em>

<em>PV = [(.045 × $1,000)/ 2] ×{(1 - {1 / [1 + (.0623/ 2)]14}) / (.0623 / 2)} + $1,000 / [1 + .0623 / 2)]14 </em>

<em>PV = $903.05</em>

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which of the following most accurately describes the difference between common stock and preferred stock
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5 0
3 years ago
EA2.
Nadya [2.5K]

Answer:

$130,500

Explanation:

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