Determine the value of the bond

Reference no: EM131488189

Question: 1. (Bond valuation) Nissan issued 20-year bonds with annual coupon rate 8 percent redeemed at par ($1,000). If the current market price of Nissan bonds is $945, what is the yield to maturity?

2. (Bond valuation) National Steel's 15-year, $1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is 7 percent.

a. Compute the bond's expected rate of return.

b. Determine the value of the bond to you given your required rate of return.

c. Should you purchase the bond.

Reference no: EM131488189

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