An investor holds a bond with a face value of $5 000, a coupon rate of 4%, and semi-annual payments that matures on 15/01/2012. How much will the investor receive on 15/01/2012?
Question
An investor holds a bond with a face value of $5 000, a coupon rate of 4%, and semi-annual payments that matures on 15/01/2012. How much will the investor receive on 15/01/2012?
Solution
The investor will receive the face value of the bond plus the last coupon payment on the maturity date.
Here's how to calculate it:
-
First, calculate the semi-annual coupon payment. The coupon rate is 4%, but since payments are made semi-annually, we divide this by 2. So, the semi-annual coupon rate is 2%.
-
Next, calculate the amount of each coupon payment. This is done by multiplying the face value of the bond (5,000 * 2/100 = $100.
-
On the maturity date (15/01/2012), the investor will receive the face value of the bond (100).
So, the investor will receive 100 = $5,100 on 15/01/2012.
Similar Questions
On 4 September 2012 a company issued a bond with a face value of $500,000 that matures exactly 20 years later. The coupon rate is 7% p.a. compounded half-yearly. What is the bond's value on 4 September 2018 assuming the market yield is 4% p.a. compounded half-yearly. Group of answer choices $655,301.73 $749,945.95 $663,832.88 $659,609.54 $705,166.09
D&G Ltd. issues bonds with a $1,000 face value that make coupon payments of $15 every six months. What is the annual coupon rate? Group of answer choices 1.50% 3.00% 6.00% 9.00% 30.00%
Consider a bond with a coupon rate of 10% and coupons paid annually. The face value is $1000 and the bond has 5 years to maturity. The yield to maturity is 11%. What is the value of the bond? 15 13 14 15Couponpayment = $1.00 (10% của 1000)
A Rs. 100 par value bond, bearing a coupon rate of 11.25% will mature after 7.5 years. What is the value of the bond, if the discount rate is 12.25% and coupons are paid semi-annually?
A five-year treasury bond with a coupon rate of 6% has a face value of $2,000. What is the semiannual coupon payment? Round the final answer to the whole integer.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.