Bond Valuation Problems
Calculate the price that you would be willing to pay for a bond that pays annual coupon payments and has the following characteristics: (a) Coupon Rate: 5%, (b) Years to Maturity: 20, and (c) The Market Rate of Interest: 6%.
Is the bond from problem 9 selling at: (a) a discount to par, (b) a premium to par, or (c) par value?
Calculate the price that you would be willing to pay for a bond that pays semi-annual coupon payments and has the following characteristics: (a) Coupon Rate: 9%, (b) Years to Maturity: 10, and (c) The Market Rate of Interest: 10%.
Is the bond from problem 11 selling at: (a) a discount to par, (b) a premium to par, or (c) par value?
Calculate the current yield on a bond that has the following characteristics: (a) Coupon Rate: 5%, (b) Price: $1,134, and (c) Market Rate of Interest: 4%.