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MrRa [10]
3 years ago
12

High noon sun, inc. has a 5%, semiannual coupon bond with a current market price of $988.52. the bond has a par value of $1,000

and a yield to maturity of 5.29%. how many years is it until this bond matures?
Business
1 answer:
9966 [12]3 years ago
5 0

The answer is 4.5 years

Given : semi annual bond

current market price : $988.52

par value : $1,000

maturity : 5.29%

PMT = 5% x $1000 / 2 = $25,

PV = $988.52,

FV = $1000, and

Int/half a year = 5.29%/2 = 2.645%.

Solving for N = 9 (semi annual periods).

9/2 = 4.5.

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Answer:

$1,667.67

Explanation:

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Price level at the beginning of the year = 100

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Anything that is worth $120 in the beginning of the year is worth $100 at the end of the year.

Anything worth $1 in the beginning is worth 100/120 at the end.

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Real value of savings is close to $1,667.67.

6 0
3 years ago
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diamong [38]

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3 0
2 years ago
Prior period adjustments to financial statements can result from: Multiple Choice Changes in estimates of salvage value. Materia
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2 years ago
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lozanna [386]

Answer:

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3 years ago
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