Ask Question
BusinessBusiness
16 January, 18:10

XYZ Corp. has a bond issue with a $ 1,000 par value and a 15% coupon rate. It pays interest annually and has 15 years remaining to maturity. It just made a coupon payment (i. e., it has 15 coupon payments left to make). If the yield to maturity of bonds with similar risk and maturity is 10%. What the price of XYZ's bond today? Round your final answer to two decimals.

+2
Answers (1)
  1. 16 January, 18:21
    0
    Answer:Bond Present Value = $1380.30

    Explanation:

    Future value (FV) = $1000

    coupon rate/interest rate (r) = 15%

    maturity (n) = 15

    yield/required return = 10%

    Bond Present Value = FV / (1 + r) ^n + p (1 - (1 + r) ^-n)) / r

    Bond Present Value = 1000 / (1 + 0.10) ^15 + 150 (1 - (1 + 0.10) ^-15) / 0.10

    Bond Present Value = 239.39204937 + 1140.9119259

    Bond Present Value = 1380.3039753

    Bond Present Value = $1380.30
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “XYZ Corp. has a bond issue with a $ 1,000 par value and a 15% coupon rate. It pays interest annually and has 15 years remaining to ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Prescott Corp. owned 90% of Bell Inc., while Bell owned 10% of the outstanding common shares of Prescott. No goodwill or other allocations were recognized in connection with either of these acquisitions.
Answers (1)
A college has found that some of its graduating students accept offers from Amazon that pay less than offers at other companies.
Answers (1)
Direct Materials Variances The following data relate to the direct materials cost for the production of 10,000 automobile tires: Actual: 145,000 lbs. at $2.80 per lb. Standard: 150,000 lbs. at $2.75 per lb. a.
Answers (1)
A company issues $60,000 of 5%, 10-year bonds dated January 1 that pay interest semiannually on each June 30 and December 31.
Answers (1)
During his second term what was bill clinton's salary A. $40,000 B. $100,000 C. $400,000 D. $500,000
Answers (1)
New Questions in Business
Shoeleather costs arise when higher inflation rates induce people to:a. spend more time looking for bargains. b. spend less time looking for bargains. c. hold more money. d. hold less money.
Answers (1)
Lewis Inc. had the following information taken from various accounts for 2015: Sales Discounts $41,000 Unearned Revenue $32,000 Total Sales $459,000 Purchase Discounts $15,000 Sales Allowances $35,000 Accounts Receivable $205,000 What was Lewis Inc.
Answers (1)
True or False: The basic economic theory of supply and demand suggests that when price drops, consumers will buy more and thus generate stronger demand.
Answers (1)
If you think carefully about what you're doing, always ask for advice when you need it, and keep asking questions, starting a business can be
Answers (2)
16. What size paper should you use for a legal document? A. 3" x 5" B. 8/2" x 11" C. 872" x 14" D. 74" x 1072"
Answers (2)
Home » Business » XYZ Corp. has a bond issue with a $ 1,000 par value and a 15% coupon rate. It pays interest annually and has 15 years remaining to maturity. It just made a coupon payment (i. e., it has 15 coupon payments left to make).
Sign Up Forgot Password?