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    Bonds- Market Value, Issuance price

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    A ten-year bond, with par value equals $1000, pays 10% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis.

    a) $1,000.00

    b) $1127.50

    c) $1297.85

    d) $2549.85

    A 30-year zero-coupon bond that yields 12% percent is issued with a $1000 par value. What is the issuance price of the bond (round to the nearest dollar)?

    a) $33

    b) $83

    c) $8333

    d) $none of the above

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    https://brainmass.com/business/finance/bonds-market-value-issuance-price-177015

    Solution Preview

    A ten-year bond, with par value equals $1000, pays 10% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis.

    a) $1,000.00

    b) $1127.50

    c) $1297.85

    d) $2549.85

    Answer: c) $1297.85 (see calculation below)

    To calculate the price of the bond we need to calculate / read from tables the values of
    PVIF= Present Value Interest Factor
    PVIFA= Present Value Interest Factor ...

    Solution Summary

    The solution calculates the Market Value of a bond that is paying semi-annual interest and issuance price of a zero-coupon bonds.

    $2.19

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