What is maximum price you should be willing to pay for bond

Assignment Help Financial Management

Reference no: EM13890340

Assume that you are considering the purchase of a 30-year, noncallable bond with a coupon rate of 4%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 5% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

$895.35

$845.46

$432.12

$1,463.63

$846.28

Reference no: EM13890340

Questions Cloud

Interpersonal conflict and effective communication : Interpersonal Conflict and Effective Communication

Distinguish among classical or a priori probability : Distinguish among classical or a priori probability, relative frequency or empirical probabil- ity, and subjective or personalistic probability. What is the disadvantage of each?

When evaluating projects using npv approach : When evaluating projects using NPV approach ____

Discuss al and bill claims against their employer : Al, a white male working in a factory, called a black coworker Bill such names as "watermelon man" and "buckwheat." The coworker told Al to stop. Al continued the name-calling and Bill called Al a "cracker" and a "honkey." Later while Al was ta..

What is maximum price you should be willing to pay for bond : Assume that you are considering the purchase of a 30-year, noncallable bond with a coupon rate of 4%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 5% yield to maturity on this investment, what is th..

Based on semiannual compounding-what is the bonds price : Kordyk Corporation's bonds have a 15-year maturity, a 8.2% semiannual coupon, and a par value of $1,000. The going interest rate (YTM) is 8.0%, based on semiannual compounding. What is the bond’s price?

Market interest rate on these bonds : Crossdyme Corporation issued 30-year, noncallable, 8.5% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 10%. What is the current price of the bonds, given that they now have 29 years to..

Stock portfolio consists of only two stocks : Your stock portfolio consists of only two stocks. You have $115,000 in Company A and $125,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio?

Bonds would have greatest percentage increase : Which of the following bonds would have the greatest percentage increase in value if all interest rates in the economy fall by 1%?

User Account

All Pages