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[DOC File]Bond Features - University of Kentucky
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The formula to price of a pure discount bond is as follows: Value of a Pure Discount Bond = F / (1+r)T. F = the face value of the bond. r = the interest rate. T = years to maturity. Level-Coupon Bond. Unlike pure discount bond, level-coupon bond offer cash payments not just at maturity, but also at regular times in between, as shown in Fig. 2 ...
face value calculation formula

[DOC File]Overview - University of Nevada, Reno
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The bond has a face value of $100 and pays a coupon rate of 5 percent per year. The bond is currently trading at $80. What is the yield to maturity on the bond? If the probability of default is 35 percent, what is the cost of debt? Assume that upon default only 50 percent of face will be recovered and that remaining coupons will not be paid.
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[DOC File]Bond Yields and Prices
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=Coupon (PVIFA r%,t) + Face value (PVIF r%,t) If a bond has five years to maturity, an $80 annual coupon, and a $1000 face value, its cash flows would look like this: Time 0 1 2 3 4 5 Coupons $80 $80 $80 $80 $80
calculate face value of bond

[DOC File]Bond Pricing
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the face value of the bond plus an interest payment once the maturity date has been reached. a fixed-interest payment every period and repays the face value at the maturity date. ... The formula for the current yield is identical to the formula describing the yield to maturity for a discount bond.
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Bond Pricing Formula | How to Calculate Bond Price? | Examples
Coupon Rate = YTM sell at par or face value. Bond Price Changes. Over time, with everything else held constant, bond prices that differ from face value must change—they must converge to Par value at maturity. Bonds sold at premium must decrease in value to Par. Bonds sold at a discount must increase in value …
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[DOCX File]Homework Assignment – Week 2
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Given a 4-year bond with a $1000 face value and a 5% coupon rate, annual compounding (annual periodic interest payments), find the price of the bond if the market rate for similar bonds is 6%. Numerical Solution. Step 1: Calculate the coupon payment . CP = Par(CR) = $1000 x 0.05 = $50. Step 2: Assign values to the variables. Step 3: Apply the ...
face value of a bond

[DOCX File]Valuation: Measuring and Managing the Value of Companies
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Example 3: (Chapter 9 material) X Corporation wants to raise some capital. They offer you a bond which has a face value of $10,000, a stated annual interest rate (or coupon rate) of 6% (paid twice a year starting 6 months from now), and a maturity date 20 years from today. You want to earn a return of 8% compounded semiannually.
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[DOC File]Bond Prices and Yields
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D = nt=1[t ( (Present Value of Ct/Price)] For a zero coupon bond, duration equals maturity . For all other bonds: duration < maturity. Computing duration: Consider a 2-year, 8% coupon bond, with a face value of $1,000 and yield-to-maturity of 12%. Coupons are paid semi-annually.
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Bond face value formula