Take-home Exercise 3Part AWhat is the value of a 10-year, $1,000 par value bond with a 10%annual coupon if its required return is 11.6%?Part B(1) What is the value of a 13% coupon bond that is otherwiseidentical to the bond described in part A? Would we now have a discount or a premium bond?(2) What is the value of a 7% coupon bond with thesecharacteristics? Would we now have a discount or a premium bond?(3) What would happen to the values of the 7%, 10%, and 13% couponbonds over time if the required return remained at 11.6%?Part C(1) What is the yield to maturity on a 10-year, 11.6% annualcoupon, $1,000 par value bond that sells for $887.00 (a)? That sells for $1,134.20(b)? (2) What are the total return, the current yield, and the capitalgains yield for the discount bond?Assume that it is held to maturity and the company does not defaulton it.Part DHow does the equation for valuing a bond change if semiannualpayments are made? Find the value of a 10-year, semiannual payment, 10% coupon bond if nominalrd = 15.6%.Part ESuppose for $1,000 you could buy a 12.6%, 10-year, annual paymentbond or a 12.6%, 10-year, semiannual payment bond. They are equally risky. Which wouldyou prefer? If $1,000 is the proper price for the semiannual bond, what is the equilibriumprice for the annual payment bond
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Take-home Exercise 3 Part A What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its requir
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