What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Round your answer to the nearest whole percent and assume annual coupon payments.
A. 14%
B. 12%
C. 11%
D. 5%

Q: What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Round your answer to the nearest whole percent

and assume annual coupon payments.
A. 14%
B. 12%
C. 11%
D. 5%

A: Since the coupon rate is 20% per year and par is 1000
coupons are $200
so the present value
of the
stream of payments is ? $200(1+i)^(-n) for n=1 to 9 plus $1000(1+i)^(-9)
i is the rate as a decimal and it is the value of this expression nearest [ [ [ to $1,407
I'm not sure the correct response is there because i=0.062 gives this result. However we ignore
the return of the $1,000 9 years

from now then i=0.052
produces a $1408.98 value for the stream of payments.
B. 5% ] ] ]

What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Round your answer to the nearest whole percent and assume annual coupon payments. A. 14% B. 12% C. 11% D. 5%

Original conversation

User: What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Round your answer to the nearest whole percent and assume annual coupon payments.
A. 14%
B. 12%
C. 11%
D. 5%

Weegy: Since the coupon rate is 20% per year and par is 1000
coupons are $200
so the present value
of the
stream of payments is ? $200(1+i)^(-n) for n=1 to 9 plus $1000(1+i)^(-9)
i is the rate as a decimal and it is the value of this expression nearest [ [ [ to $1,407
I'm not sure the correct response is there because i=0.062 gives this result. However we ignore
the return of the $1,000 9 years from now then i=0.052
produces a $1408.98 value for the stream of payments.
B. 5% ] ] ] tiffanylatrelle|Points 108|

User: The common stockholders are most concerned with:
A. the size of the firm’s beginning earnings per share.
B. the risk of the investment.
C. the spread between the return generated on new investments and the investor’s required rate of return.
D. the percentage of profits retained.

Weegy: B. The size of the firm's beginning earnings per share. nikkidonker|Points 100|

User: Bondholders have a priority claim on assets ahead of:
A. shareholders.
B. investors
C. creditors.
D. common and preferred stockholders.

User: Bondholders have a priority claim on assets ahead of:
A. shareholders.
B. investors
C. creditors.
D. common and preferred stockholders.

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