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Question
A $$\$ 1,000$$ Expo Corp, bond has a coupon rate of $5 \%$, pays interest semiannually, and matures in six years. If the yield to maturity is $7 \%$, what is the bond's value today?
Instant Answer
Step 1
- The face value of the bond is $1,000. - The coupon rate is 5%, which means the bond pays 5% of its face value in interest each year. - Interest is paid semiannually, so the bond pays interest twice a year. - The bond matures in 6 years. - The yield to maturity Show more…
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You are considering buying a bond that is currently priced at $$\$ 830$$, has a face value of $$\$ 1,000$$, and matures in seven years. If interest is paid semiannually and the bond has a yield to maturity of $6 \%$, what is the bond's annual coupon rate?
Bonds and Bond Valuation
Problems
Calculate the present value of a $\$ 1,000$ discount bond with five years to maturity if the yield to maturity is $6 \%$
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