Purchase Solution

Bonds Price Today

Not what you're looking for?

Ask Custom Question

One year ago a $1000 face value 6% coupon bond was selling for $918.93. Since then, the market return decreased by two percentage points. The bond pays interest semiannually and now has four years to maturity. The bond's price today is?

Purchase this Solution

Solution Summary

This solution is comprised of a detailed explanation to answer the bonds price today.

Solution Preview

Please find the revision for AT&T bond and response for your question below.

REVISION FOR AT&T bond
Calculate the ANNUAL yield to maturity for this bond
You are considering the purchase of an AT&P bond with a 13% coupon rate. Interest is paid and compounded semiannually. The bond will mature in 8 years, and has a $1000 face value. The bond currently sells for $867. Calculate the ANNUAL yield to maturity for this bond. (Round to nearest percentage)
We need to calculate how much the bonds have been issued by using the formula as follows: -

where B is the issued price
C is the coupon payment
r is the discount or yield rate
n is the period

Because we need to find the yield to maturity, we need to replace the information given into the equation and calculate for the yield to maturity.

C, which is the annual coupon payment, can be ...

Purchase this Solution


Free BrainMass Quizzes
Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking