Consider a zero-coupon bond with a maturity of 13 years and a face value of $1 Million. If the current market price of the bond is $751,226, and interest accrues semi-annually, what is the nominal yield-to-maturity of the bond?

Consider a zero-coupon bond with a maturity of 13 years and a face value of $1 Million. If the current market price of the bond is $751,226, and interest accrues semi-annually, what is the nominal yield-to-maturity of the bond?

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 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

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Consider a zero-coupon bond with a maturity of 13 years and a face value of $1 Million.

If the current market price of the bond is $751,226, and interest accrues semi-annually, what is the nominal yield-to-maturity of the bond?

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