Determining the maximum price and current yield

Reference no: EM1310651

Q1) 12.58% coupon bonds of Peterson Co. are selling for= $822.17. Bonds mature in five years and pay interest semi-annually. These bonds have present yield of _____ percent.

Q2) XYZ has issued a bond with characteristics: Par: $1,000; Time to maturity: 17 years; Coupon rate: 6%; Suppose semi-annual coupon payments. Compute price of this bond if YTM is 4.17%

Q3) Suppose that you want to buy a 18-year bond that has the maturity value of $1,000 and coupon interest rate of 5%, paid semi-annually. If you need a 4.42% rate of return on this investment (YTM), determine the maximum price that you must be eager to pay for this bond? Solve for PV. You paid $852 for corporate bond which has a 10.85% coupon rate. Compute the current yield?

Reference no: EM1310651

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