Calculator for present value of coupon bond
[DOC File]CHAPTER 9
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We model the value of a security as the present value of the future cash flows from owning the security discounted at the appropriate required rate of return. ... a bond selling at its maturity value (because the bond's coupon rate equals investors' required rate of return). ... Using the financial calculator: (a) 16-year bond: FV = 1000. PMT ...
[DOC File]CHAPTER 7
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The 5 percent coupon bond’s value is $604.48, while the 10 percent coupon bond’s value is $887.00. Thus, the lower-coupon bond has more interest rate risk than the higher-coupon bond. The lower the coupon, the greater the percentage of the cash flow that will come in the later years (from the maturity value), hence, the greater the impact ...
[DOC File]First, you have to do problem 4-9 using a financial calculator
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A 10 year, 12 percent semiannual coupon bond with a par value of $1000 may be called in 4 years at a call price of $1060. The bond sells for $1,100 (assume the bond has just been issued) What is the bond’s yield to maturity. What is the bond’s current yield. What is the bond’s capital gain or loss yield. What is the bond’s yield to call
[DOC File]Winthrop University
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There are three ways to solve for the bond’s price. Using the mathematical formula. Using the present value tables. Using a financial calculator. Solve for a bond’s price given the information below. The par value of the bond is $1000. The coupon rate of the bond is 12 percent, paid annually. The bond matures in 3 years.
[DOC File]Sample midterm
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1. The discount rate that makes the present value of a bond’s payments equal to its price is termed the: A) capital gain yield. B) yield to maturity. C) current yield. D) coupon rate. 2. The coupon rate of a bond equals: A) its yield to maturity. B) coupon as a percentage of its face value. C) the maturity value. D) coupon as a percentage of ...
[DOC File]Bond Pricing
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A bond is characterized by three sets of cash flows: initial investment, periodic coupons, and final redemption. Value of a bond is simply the present value of its cash flows. In general, there are three types of bonds: pure discount bond, level-coupon bond, and consol. Pure Discount Bond. Pure discount bond is also known as the zero-coupon bond.
[DOC File]Quantitative Problem Chapter 3
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9. A 10-year, 7% coupon bond with a face value of $1,000 is currently selling for $871.65. Compute your rate of return if you sell the bond next year for $880.10. Solution: 10. You have paid $980.30 for an 8% coupon bond with a face value of $1,000 that mature in five years. You plan on holding the bond …
[DOC File]Soln Ch 13 Bond prices
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An increase in the discount rate (i.e., the market rate) decreases the present value of the future cash flows. 4. a. Effective annual rate for 3-month T-bill: b. Effective annual interest rate for coupon bond paying 5% semiannually: (1.05)2 – 1 = 0.1025 or 10.25%. Therefore the coupon bond has the higher effective annual interest rate. 5.
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