Calculate the rate of an individual bond


Question: Wilson Company will issue $300,000,000 of seven percent, $1000 per bonds on November 15, 2004. The bonds will pay interest semiannually & mature on November 15, 2011.

[A] Calculate the rate of an individual bond from this issue to an investor who purchases the Wilson bond on the date of issue [November 15, 2004] suppose they require an 8% return?

[B] Without doing the computation would the value of the bond go up, go down or stay the same if the maturity date was changed to November 15, 2009. Explain answer.

[C] Without doing the computation would the value of the bond go up, go down or stay the same if the required interest rate increased to 12 percent. Explain your answer.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Calculate the rate of an individual bond
Reference No:- TGS018749

Expected delivery within 24 Hours