Calculate the current yield on this bond

Assignment Help Finance Basics

Reference no: EM13259976

Mike has just paid $1,174 for a 5-year bond with a par value of $1,000 and a coupon rate of 9%.

a. What dollar amount of interest will he receive from this bond every six months? Explain or show work.

b. If market interest rates rise while Mike is holding the bond, will the market price of the bond rise or fall?

c. If the market price of this bond changes while Mike is holding it, will Mike's interest payments change? Explain.

d. Calculate the current yield on this bond, expressed as a percentage rounded to two decimal places.

Reference no: EM13259976

Questions Cloud

Describe process you would follow to shortlist suppliers : Describe the process you would follow to shortlist suppliers for this purpose. How will you determine if the supplier is an approved National Health Service (NHS) supplier?

What is the linear speed of the disk : Suppose a disk of radius R and mass M starts from rest at a height of 2.5m, What is the linear speed of the disk when it leaves the incline

Find the conversion premium in dollars and in percent : Find the payback period. Explain what this means in your own words without quoting the definition of payback period. In addition, state whether or not this is considered to be an acceptable payback period.

What would a fully-taxable corporate bond have to yield : What would a fully-taxable corporate bond have to yield in order to produce the same after-tax return as the 5% municipal bond? Show work. Express your answer as a percentage rounded to two decimal places.

Calculate the current yield on this bond : What dollar amount of interest will he receive from this bond every six months? Explain or show work.

Find the flow speed of the medicine through the needle : A 3.5 mL syringe has an inner diameter of 5.0 mm, a needle inner diameter of 0.24 mm, and a plunger pad diameter, The nurse empties the syringe in 2.3 s. What is the flow speed of the medicine through the needle

Job order costing system : Finlon Upholstery, Inc. uses a job order costing system to accumulate manufacturing costs. The company’s work-in-process on December 31, 20x1, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no ..

What will your interest payments be next year : You have just purchased a 10-year TIPS with face value $1,000 and a 4% coupon rate. Inflation for the year turns out to be 6%. What will your interest payments be next year? Show work and explain.

Generate and review requirement for procurement : Discuss the process you would follow to generate and review requirements and specifications for procurement. What information would you gather as part of a procurement specification?

User Account

All Pages