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Alisiya [41]
2 years ago
12

Five years​ ago, Simpson Warehouses Inc. issued twentyminusfiveminusyear ​10% annual coupon bonds with a​ $1,000 face value each

. Since​ then, interest rates in general have risen and the yield to maturity on the Thompson bonds is now​ 12%. Given this​ information, what is the price today for a Thompson Tarps​ bond?
Business
1 answer:
anastassius [24]2 years ago
8 0

Answer:

The price today for a Thompdon

tarps bond is $850.61

Explanation:

coupon rate = 10%

NPER = 20

Face value = $1000

PMT = Face value*coupon rat

        = 100

yield = 12%

price = PV = $850.61

Therefore, The price today for a Thompdon

tarps bond is $850.61

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Crossfade Corp. has a bond with a par value of $2,000 that sells for $1,902.14. The bond has a coupon rate of 6.48 percent and m
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Answer:

yield to maturity = 7.06%

Explanation:

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YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

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YTM = {64.80 + [(2,000 - 1,902.14) / 24]} / [(2,000 + 1,902.14) / 2] = (64.80 + 4.0775) / 1,951.07 = 0.0353 or 3.53% semianually or 7.06% annually

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