LKD Co. has 14 percent coupon bonds with a YTM of 9.8 percent. The current yield

Question

LKD Co. has 14 percent coupon bonds with a YTM of 9.8 percent. The current yield on these bonds is 10.3 percent. How many years do these bonds have left until they mature? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

years

2.

What is the Macaulay duration of a 7.6 percent coupon bond with seven years to maturity and a current price of $1,032.20? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.)

LKD Co. has 14 percent coupon bonds with a YTM of 9.8 percent. The current yield on these bonds is 10.3 percent. How many years do these bonds have left until they mature? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Explanation / Answer

Answer:1  If the coupon rate is 14% and the current yield is 10.3%, then the current price is:

Current price=Interest/Current yield

=14 /0.103 = $135.92 per $100 par value.

135.92=14*PVIFA(9.8%,n)+$100*PVIF(9.8%,n)

N=19.48 years

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.