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Black_prince [1.1K]
2 years ago
14

Lincoln Park Co. has a bond outstanding with a coupon rate of 5.73 percent and semiannual payments. The yield to maturity is 6.7

percent and the bond matures in 23 years. What is the market price if the bond has a par value of $2,000?
Business
1 answer:
Natalija [7]2 years ago
5 0

Answer:

Bond Price​= $1,774.05

Explanation:

Giving the following information:

Coupon rate= 0.0573/2= 0.02865

YTM= 0.067/2= 0.0335

The bond matures in 23 years.

Par value= $2,000

<u>To calculate the bond price, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 57.3*{[(1 - (1.0335^-46)] / 0.0335} + [2,000/1.0335^46]

Bond Price​= 1,334.76 + 439.29

Bond Price​= $1,774.05

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"James has just joined CoraTech Systems, where he has been assigned to Paul and Natalie for sources of information about the com
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C. Buddy System

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3 years ago
The more information an entrepreneur acquires during the process of _____, the higher the chance that his or her predictions wil
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Hence, the expected return of a portfolio that has invested is 0.0625

Therefore the same should be considered and relevant

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