Solve for question 21 -y21. Consider a coupon bond that has a $1,000 par valueand a coupon rate of 10%. The bond is currently sell-ing for $1,044.89 and has two years to maturity. Whatis the bond's yield to maturity?alueforn in22. What is the price of a perpetuity that has a couponof $50 per year and a yield to maturity of 2.5%? Ifthe yield to maturity doubles, what will happen to itsprice?

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21. Consider a coupon bond that has a $1,000 par value and a coupon rate of 10%. The bond is currently sell- ing for $1,044.89 and has two years to maturity. What is the bond's yield to maturity? 22. What is the price of a perpetuity that has a coupon of $50 per year and a yield to maturity of 2.5%? If the yield to maturity doubles, what will happen to its price?

21. Consider a coupon bond that has a $1,000 par value and a coupon rate of 10%. The bond is currently sell- ing for $1,044.89 and has two years to maturity. What is the bond's yield to maturity? 22. What is the price of a perpetuity that has a coupon of $50 per year and a yield to maturity of 2.5%? If the yield to maturity doubles, what will happen to its price?

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 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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