newconnect.mheducation.com Assignments: FA18:I AOL Mail (1961 Cheag Study HW 6 N
ID: 2811540 • Letter: N
Question
newconnect.mheducation.com Assignments: FA18:I AOL Mail (1961 Cheag Study HW 6 NBA Basketball Scor Re: BUS-F370 Mi Campus Tutoring HowtaDoin FFL Scor Fantasy Football I HW 6 Saved Help Save & Exit Submit Check my work 2 A General Power bond carries a coupon rate of 8.9%, has 9 years until maturity, and sells at a yield to maturity of 7.9%. (Assume annual interest payments.) a. What interest payments do bondholders receive each year? 9.09 points Interest payments eBook b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Print c. what will happen to the bond price if the yield to maturity falls to 6.9%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price will by d. If the yield to maturity falls to 6.9%, will the current yield be less, or more, than the yield to maturity? Mc Graw Pre 2 of 11 Next >Explanation / Answer
a
b
=+(1-(1+7.9%)^(-9))/7.9%=6.2729
=+1/(1+7.9%)^9=.5044
c
Price Will Increase by 68.13
d Yes
Current yield will more than yield to maturity
Current Yiels =89/1,130.86=7.87%
a Interest Payment 1000*8.9%=$89Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.