Purchase Solution

Bond value- For this problem, consider a 6% coupon bond that matures in 20 years

Not what you're looking for?

Ask Custom Question

Please explain in spreadsheet format.

For this problem, consider a 6% coupon bond that matures in 20 years. What would be the value of this bond if interest rates fall to 5% the day after it is purchased? If interest rates fell to 5% after one year, what would the bond be worth at that point?

Purchase this Solution
Solution Summary

This solution provides steps to determine the value of a bond.

Solution provided by:
Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
Recent Feedback
  • "Thank you."
  • "thank you Chidi Ngene.. if you have any APA references would be great"
  • "Thank you so much for your help, your explanations were easy to understand and apply!"
  • "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
  • "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Operations Management

This quiz tests a student's knowledge about Operations Management

Learning Lean

This quiz will help you understand the basic concepts of Lean.

View More Free Quizzes
Related BrainMass Solutions

  • Values of Bonds for given interest rates

    494451 Values of Bonds for given interest rates For this problem, consider a 6% coupon bond that matures in 20 years. What would be the value of this bond if interest rates fall to 5% the day after it is purchased?

  • Bond value & duration

    c) Which bond do you expect experienced the greatest percentage change in price? d) What is the percentage cnage in the price of each bond? 3) What is the current price of this bond: face value of $40,000, matures in 20 years.

  • Bond Calculations

    Determine the value of a $1,000 denomination Bell South bond with a 7 percent coupon rate maturing in 20 years for an investor whose required rate of return is: a. 8 percent b. 7 percent c. 5 percent 2.

  • Bond Valuation Methods

    551763 Find the market value of a bond in the given cases. Bond valuation A tax-exempt bond was recently issued at an annual 12 percent coupon rate and matures 20 years from today. The par value of the bond is $1,000. a.

  • Bond prices

    The Nickelodeon Manufacturing Co. has a series of $1000 par value bonds outstanding. Each bond pays interest semi-annually and carries an annual coupon rate of 7%. Some bonds are due in three years while others are due in 10 years.

  • Calculate Bond Face Value

    - The bond matures in 15 years 2. How much should a $1,000-face-value bonds sell for, assuming the following conditions: - The bond pays a coupon of 7% - The coupon payments are paid semi-annually.

  • Describing the Features of the Bond

    The bond has a par value of $1,000 and a yield to maturity of 6.72 percent. How many years is it until this bond matures? Question 20 options: 1) 12.26 years 2) 12.53 years 3) 18.49 years 4) 24.37 years 5) 25.05 years.

  • Bonds:YTM, YTC, PV, value, current yield, capital gain yield

    If similar bonds yield 12.60%, what is the bond's value? 5. Bond YTM 2 A bond that matures in 27 years pays interest every 6 months based on its $1,000 face value and 8.30% coupon rate.

  • Present Values/Future Values/Interest Rate Calculations

    Bond Pricing. If Circular File (A 6-year Circular File bond pays interest of $80 annually and sells for $950.) wants to issue a new 6-year bond at face value, what coupon rate must the bond offer? 6. Bond Yields.

View More Related Solutions