Answered: A Php 100,000,10% bond pays dividend…

A Php 100,000,10% bond pays dividend every quarter for 8 years. The bond price at par and is redeemable at 110% of the par value Find the yield to maturity.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 7P: Bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 10% coupon rate,...

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Question

A Php 100,000,10% bond pays dividend every quarter for 8 years. The bond price at par and is redeemable at 110% of the par value Find the yield to maturity.

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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