Answer for Number 29 & 30

Answer for Number 29 & 30 - $40.00 =80/2 No of...

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23) Coupon @ 8% = 80 Par /Face value= 1000 Redemption value= $1,150 Maturity= 6 years Price= $1,106.77 Yield To Call = 7.73% =(80+(1150-1106.77)/6)/(0.5*(1150+1106.77)) Therefore, the answer is not given in the multiple choice selection! EXCEL: No of years to call= 6 Coupon rate= 8.00% Face value= $1,000 Frequency = S Semi annual coupon payments Call price= 115% Redemption value = $1,150 =115.% x 1000 Price of the bond= $1,106.7 7 calculated above Interest payment per year= $80.00 =8.% x 1000 Interest payment per period=
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Unformatted text preview: $40.00 =80/2 No of Periods =n= 12 =2x6 Yield= 7.75% (Using EXCEL Function RATE) 29) P2 = Div3/(1+r) + Div4/(1+r)^2 + Div5/[(1-g)*(1+r)^2 Div3=Div0*(1+0%)^2*(1+5%)=0.50*1.05=0.525 Div4=Div3*(1+5%)=0.55125 Div5=Div4*(1+10%)=0.606375 P2 = 0.525/(1+12%) + 0.55125/(1+12%)^2+0.606375/((12%-10%)*(1+12%)^2) P2= 25.078125 P0=Div1/(1+r)+Div2/(1+r0^2+P2/(1+r)^2 P0=0.5/(1+12%) + 0.5/(1+12%)^2 + 25.078125/(1+12%)^12= 20.83715322 The Answer is None of the Above!...
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This note was uploaded on 07/12/2009 for the course ECN 1211 taught by Professor Maloney during the Spring '09 term at Fairleigh Dickinson.

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