A company issues a5-year bond with a 10000000 face value

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Reference no: EM13611311

1)A company issues a5-year bond with a $10,000,000 face value and 4% coupon rate.Assume interest is paid at the end of each year. If the market rateof interest is 5%, how much will the company receive when the bondsare sold?

2)A company wants to invest in a corporate bond,and wants to earn a return of 4% on the bond. How much will thecompany pay for a 4-year bond with a coupon rate of 5% and facevalue $1,000,000? Assume interest is paid at the end of eachyear.

Reference no: EM13611311

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