What is the present value of the bond

Assignment Help Financial Management

Reference no: EM131815578

A bond has a coupon of 5% and a face value of $1000 and will pay interest every six months for the next three years. At the end of the third year, you will receive a principal of $1000 in addition to the coupon.

a) What is the present value of the bond, assuming the market discount rate, r = .08?

b) What is the duration of this bond?

c) If the market rate were to change instantaneously to r=.06, what would duration predict the new price would be?

Reference no: EM131815578

Questions Cloud

Research the fixed and variable expenses : Research the Fixed and variable expenses if your plan is a market expansion plan for an existing organization, or a mergers and acquisitions plan.

Consistent with the firm share price maximization goals : Compare and contrast the decisions that are consistent with the firm’s share price maximization goals.

Pick one area of emphasis and then defend your position : As the chief clinical officer of a managed care company you were asked by the CEO and the CFO to take a position on whether the Managed Care Company

Find reported health statistics on the variable : Describe the spread/distribution of your data. Be sure to describe the variance of distribution and the concept of standard deviation.

What is the present value of the bond : What is the present value of the bond, assuming the market discount rate, r = .08? What is the duration of this bond?

Calculate the product cost per sleeping bag : Budgeted fixed overhead in 20x4 was $400,000 and budgeted production was 25,000 sleeping bags. Calculate product cost per sleeping bag under throughput costing

Health care and ethics topic selection : Submit your ethical theory selection for the project to your instructor for approval. Though the general details of the project are in the project description

How family members can influence value perceptions : Explain how family members can influence value perceptions. Give 3 personal examples.

According to generally accepted accounting principles : According to Generally Accepted Accounting Principles, costs are:

User Account

All Pages