(a) Even though most corporate bonds in the World make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. A Zambian company issues a bond with a par value of K1,000, 15 years to maturity, and a coupon rate of 8.4 percent paid annually. If the yield to maturity is 7.6 percent, what is the current price of the bond? (b) A Japanese company has a bond outstanding that sells for 87 percent of its ¥100,000 par value. The bond has a coupon rate of 5.4 percent paid annually and matures in 21 years. What is the yield to maturity of this bond?
(a) Even though most corporate bonds in the World make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. A Zambian company issues a bond with a par value of K1,000, 15 years to maturity, and a coupon rate of 8.4 percent paid annually. If the yield to maturity is 7.6 percent, what is the current price of the bond? (b) A Japanese company has a bond outstanding that sells for 87 percent of its ¥100,000 par value. The bond has a coupon rate of 5.4 percent paid annually and matures in 21 years. What is the yield to maturity of this bond?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 20P
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