Semiannual bond is reporting convenience

Assignment Help Financial Management

Reference no: EM131883682

XYZ Corp has bonds on the market with 7.5 years to maturity, a YTM of 6 percent, and a current price of $1,020. The face value is $1,000. The bonds make semiannual payments. What must be the dollar coupons (dollar amount, not percentage) paid every six-months on XYZ’s bonds?

Hint: A YTM of 6% for a semiannual bond is a reporting convenience. It implies the actual 6 month return is 3%.

You need to use the annuity formula to solve this one.

Reference no: EM131883682

Questions Cloud

Dividends come from earnings-earning come from sales revenue : Dividends come from earnings; earnings come from sales revenue.

What is the hedge ratio of the call : The range of S is 40 while that of C is 20 across the two states. What is the hedge ratio of the call?

Find the value for european put option : Use the Black-Scholes model to find the value for a European put option that has an exercise price of $62.00 and four months to expiration.

What is one share of this stock worth : The Elder Co. is in downsizing mode. What is one share of this stock worth?

Semiannual bond is reporting convenience : A YTM of 6% for a semiannual bond is a reporting convenience. It implies the actual 6 month return is 3%.

Describe the returns on common stocks : Consider an economy where two factors are sufficient to describe the returns on common stocks.

What is the portfolio equilibrium expected return : According to APT, what is the portfolio's equilibrium expected return?

A forward pe is generally based on the projected : Which of the following characteristics are are not shared by a SEP and a SIMPLE plan? A forward PE is generally based on the projected:

Penalty tax for premature distributions : Which of the following distributions from a qualified plan would be subject to the 10% penalty tax for premature distributions?

User Account

All Pages