Answer:
Answer is given below.
Explanation:
SOLUTION
a. Calculation of Coupon Payment
Coupon Payment
= Face Value X Coupon Rate
/2
Coupon Payment = 1000*5.5% /2
Coupon Payment = 55 /2= 27.5
Therefore the Coupon Payment is = 27.51
cash flow diagram is attached.
Answer:
Coupon= $30 per period.
20 period for semi annual coupon payment.
28.148% discount rate
Explanation:
1.) Coupon rate * face value of bond = coupon
semi annual rate =6%/2=3%
Coupon= 1000 *3%= $30 per period.
2.) t= number of periods = years of maturity * coupon payment semi-annual
t= 10 * 2 = 20 periods.
3. Discount rate formula =C+[(F-P)/t] / (F+P/2)
where C=coupon payment annual
F= face value of security
P=price of security= 1000 *8%=80
t= years of maturity.
so we have⇒ 60+[(1000-80)/10]/(1000+80)/2
=152/540
=28.148%
U.S. macroeconomic policy package of 1965-1968
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