Consider a Bank of America (BAC) bond that has a 6% coupon rate and pays annual coupons. The bond has 11 years to maturi

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answerhappygod
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Consider a Bank of America (BAC) bond that has a 6% coupon rate and pays annual coupons. The bond has 11 years to maturi

Post by answerhappygod »

Consider a Bank of America (BAC) bond that has a 6% coupon rate
and pays annual coupons. The bond has 11 years to maturity and the
yield to maturity is 8%. If this BAC bond has a face value of
$10,000, what is the current price of the bond?
What would the new price of the bond be if BAC stated that they
would not be paying coupons in years 1-4 and those coupons would
instead be paid at the end of maturity without interest?
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