A bond with 12 years to maturity and a semiannual coupon rate of 7.64 percent has a current yield of 7.21 percent. The bond's par value is $1,000. What is the bond's price? Group of answer choices $1,059.64 $529.82 $1,034.15 $1,056.02

A bond with 12 years to maturity and a semiannual coupon rate of 7.64 percent has a current yield of 7.21 percent. The bond's par value is $1,000. What is the bond's price? Group of answer choices $1,059.64 $529.82 $1,034.15 $1,056.02

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 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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Question

A bond with 12 years to maturity and a semiannual coupon rate of 7.64 percent has a current yield of 7.21 percent. The bond's par value is $1,000. What is the bond's price?

Group of answer choices

$1,059.64

$529.82

$1,034.15

$1,056.02

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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