Find the value of a bond maturing in four years

Reference no: EM13953184

1. What is the appropriate yield to maturity for a $1000 par value bond selling for $1120 that matures in 6 years and pays 12% interest annually?

Hint: Use your critical analysis and trial-error method to estimate the yield to maturity. Provide all workings.

2. Find the value of a bond maturing in 4 years, with a $100 par value and a coupon interest rate of 6% (paid semi-annually). The required return of similar risk bonds is 14% (paid semi-annually). Is the bond valued at a discount, at par or at a premium to par? Explain your answer.

Reference no: EM13953184

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Find the value of a bond maturing in four years : Find the value of a bond maturing in 4 years, with a $100 par value and a coupon interest rate of 6% (paid semi-annually). The required return of similar risk bonds is 14% (paid semi-annually).

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