Calculate the current price of a $1,000 par value bond...

This preview shows page 1 - 2 out of 2 pages.

Practice Bond Valuation Problems SOLUTIONS 1. Calculate the current price of a $1,000 par value bond that has a coupon rate of 6% p.a., pays coupon interest annually, has 14 years remaining to maturity, and has a yield to maturity of 8 percent.
2. You intend to purchase a 10-year, $1,000 par value bond that pays interest of $60 every six months. If the yield to maturity is 10% with semiannual compounding, how much should you be willing to pay for this bond?
3. What is the price of a $5000 par value bond, with a coupon rate of 7.5% (coupon interest paid quarterly), 15 years remaining to maturity and a yield to maturity of 8.25%?
4. Dak, Inc. has a bond outstanding with a par value of $10,000 that makes monthly coupon payments. The coupon rate is 9 percent and the bond has 24 years remaining to maturity. If the yield to maturity of similar bonds is 9.35 percent, what is the current price of the bond?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture