What is the value of the bond today

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Reference no: EM133412371

Assignment:

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1- a. What is the return if I buy this bond? 12 years to maturity 1000 par 10% coupon Bond selling price is $850

b. What is the return if I buy this bond? 8 years to maturity 1000 par 10% coupon Bond selling price is $850

c. What is the return if I buy this bond? 20 years to maturity 1000 par 10% coupon Bond selling price is $850

d. What conclusion can I draw about the time to maturity relative to yield for bonds selling at a discount?

2- ABC Co. had a bond issue. Coupon 8%, 10 years, market rate is 7%, $1000 par.

1. What is the value of the bond today?

2. What if the time period for ABC was 1 year instead of 10?

3. What if the time period for ABC was 15 years instead of 10?

Reference no: EM133412371

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