Question 9 One year ago, XYZ Co. issued 16-year bonds at par. The bonds have a coupon...

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Finance

Question 9
One year ago, XYZ Co. issued 16-year bonds at par. The bondshave a coupon rate of 6.49 percent, paid semiannually, and a facevalue of $1,000. Today, the market yield on these bonds is 6.85percent. What is the percentage change in the bond price over thepast year? Answer to two decimals

Question 10
Suppose ABC Co. issues $18.37 million of 17 year zero couponbonds today. If investors require a return of 6.18 percentcompounded semiannually and all the bonds remain outstanding untilthey mature, how much (in $ millions) will ABC have to pay toredeem the bonds. Answer in millions to two decimals - ie, if youget $50,268,382, you should enter 50.27.

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4.5 Ratings (977 Votes)

9 ParFace value 1000 Annual Coupon rate 00649 Annual coupon 649 semiannual coupon 3245 Present Value Future value1rmmt r is the interest rate that is 685 m is the compounding period that is 2 mt is the time period price of the bond sum of present values of future cash flows r2 See Answer

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