Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. ???(bond valuation) a bond that matures in 8 years

???(Bond valuation) A bond that matures in 8 years has a ?$1,000 par value. The annual...

90.2K

Verified Solution

Question

Finance

???(Bond valuation) A bond that matures in 8years has a ?$1,000 par value. The annual coupon interest rate is 9percent and the? market's required yield to maturity on a?comparable-risk bond is 18 percent.

What would be the value of this bond if it paid interest?annually?

What would be the value of this bond if it paid interest?semiannually?

*Someone previously answered this with annually = $604.56 andsemiannually = $596.89 and the annual number is incorrect*

Answer & Explanation Solved by verified expert
3.6 Ratings (421 Votes)
Annual compounding Information provided Par value future value 1000 Time 8 years Coupon rate 9 Coupon payment 0091000 90 Yield to maturity 18 The value of the bond is    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

???(Bond valuation) A bond that matures in 8years has a ?$1,000 par value. The annual coupon interest rate is 9percent and the? market's required yield to maturity on a?comparable-risk bond is 18 percent.What would be the value of this bond if it paid interest?annually?What would be the value of this bond if it paid interest?semiannually?*Someone previously answered this with annually = $604.56 andsemiannually = $596.89 and the annual number is incorrect*

Other questions asked by students

Q

Sustainable Concept Air pollution in Asia has worsened since 2000 and is responsible for deaths of thousands...

Civil Engineering
Q

This is problem 5-17 from El-Wakil’s Powerplant Technology book -- consider a simple combination turbine with...

Mechanical Engineering
Q

On January 1, 2017, Sheffield Company makes the two following acquisitions. 1. Purchases land having a...

Accounting
Q

Thermoregulation in the human may be carried out bythe action of certain hormones (ie epinephrine)...

Biology
Q

2 17 A 100 F capacitor is charged to 100V After the charging battery is...

Physics
Q

4 pts To estimate the mean heights which are normally distributed of female students on...

Statistics
Q

Consider a society consisting only of Helen who allocates her time between sewing dresses and...

Statistics
Q

y 2 cot 2x Drag the movable red point to set the asymptotes for one...

Calculus
Q

For every unit that a company produces and sells above the breakeven point, its profitability...

Accounting
Q

Assume the partnership of Richard, Harry, and William has been in existence for a number...

Accounting
Q

E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will...

Finance
Q

Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The...

Accounting