Market price of the bond if yields to maturity for risk

Assignment Help Financial Management

Reference no: EM131997969

A bond will pay an annual 7.5 per cent coupon until maturity (the next coupon will be paid in one year). The bond matures in six years.

(a) What will be the market price of the bond if yields to maturity for this risk class fall to 6.5 per cent?

(b) What will be the market price of the bond if yields to maturity for this risk class rise to 8.5 per cent?

Reference no: EM131997969

Questions Cloud

Estimate of the maximum share price for the purchase : What is the maximum share price that Happy Times should be willing to pay for Joe’s? What is your new estimate of the maximum share price for the purchase?

What will be the change in the bond price in dollars : What will be the change in the bond's price in dollars? Assume interest payments are paid semi-annually and par value is $1,000.

What is promotion research : What is promotion research? Discuss how marketers determine whether the promotion research is doing its job or not.

The cash or credit option how to interpreted : Based on your example calculation of the present value, which option will be better – the cash or credit option how to interpreted?

Market price of the bond if yields to maturity for risk : What will be the market price of the bond if yields to maturity for this risk class fall to 6.5 per cent?

Calculate weightings and alpha of your zero-beta portfolio : Combine this portfolio with the market portfolio to form a zero-beta portfolio. Calculate the weightings and alpha of your zero-beta portfolio.

What is the company net profit and equity for the year : Company’s Statement of Financial Position showed that total assets were R15 820 000. what is the company’s net profit and equity for the year

Imagine that market yield to maturity for three-year bonds : Imagine that the market yield to maturity for three-year bonds in a particular risk class is 11 per cent.

Finance which may be used to purchase the new equipment : Write a report for the board of directors explaining the nature of the four forms of finance which may be used to purchase the new equipment:

User Account

All Pages