wine and roses inc offers a 7.5 percent coupon bond with semiannual payments and

Question

wine and roses inc offers a 7.5 percent coupon bond with semiannual payments and a yield to maturity of 7.95%. The bonds mature in 15 years. What is the market price of a $1000 face value bond? wine and roses inc offers a 7.5 percent coupon bond with semiannual payments and a yield to maturity of 7.95%. The bonds mature in 15 years. What is the market price of a $1000 face value bond? wine and roses inc offers a 7.5 percent coupon bond with semiannual payments and a yield to maturity of 7.95%. The bonds mature in 15 years. What is the market price of a $1000 face value bond? Wine and Roses, Inc. offers a 7.5 percent coupon bond with semiannual payments and a yield to maturity of 7.95 percent. The bonds mature in 15 years. What is the market price of a $1,000 face value bond? O $1,650.42 O $1,611.40 O $960.97 O $1,310.55 O $1,145.89

Explanation / Answer

Price of bond will be Present value of its coupon payments and maturity value. Present value of coupon* 37.5 x (P/A,3.975%,30) *1000 x 7.5% x 1/2 37.5 x                17.34464      650.42 **7.95%/2 = 3.975% *** 15 x 2 = 30 Present value of maturity value 1000 x (P/F,3.975%,30 1000 x                  0.31055      310.55 Total of present value(Price) $ 960.97 Ans is c

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.