lie is contemplating buying a 10-year, $1,000 bond with a 7% coupon rate (coupons paid semiannually). The bond is trading at a price that implies a $906.92 bond value (i.e., per $1,000 of face). a. What is the bond's yield to maturity (YTM)? b. If the bond's YTM changes to 8%, what will the bond's value be (per $1,000 of face)?

lie is contemplating buying a 10-year, $1,000 bond with a 7% coupon rate (coupons paid semiannually). The bond is trading at a price that implies a $906.92 bond value (i.e., per $1,000 of face). a. What is the bond's yield to maturity (YTM)? b. If the bond's YTM changes to 8%, what will the bond's value be (per $1,000 of face)?

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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Part 1

a. The YTM is

enter your response here%.

(Round to two decimal places.)

b. The value per $1,000 of face at the new YTM is

$enter your response here.

(Round to the nearest cent.)

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