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Draw a timeline showing the cash flows for this bond

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Reference no: EM133125356

Question - Assume that you are considering an investment in a corporate bond with the following characteristics:

Par value $1,000

Coupon rate 8% per year

Payment schedule semiannual (February 1 and August 1)

Maturity date February 1, 2040

The bond's current market value is 97.65 (that is, 97.65% of par value).

For this bond, assume a required rate of return equal to 7.6% per year.

Required -

1. Draw a timeline showing the cash flows for this bond; and

2. Calculate the bond value based on the required rate of return; and

3. Calculate the yield-to-maturity based on the current market price.

Reference no: EM133125356

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