Applying Time Value of Money Concepts Complete the missing information in the ta

Question

Applying Time Value of Money Concepts Complete the missing information in the table below. Assume that all bonds pay interest semiannually, Do not use negative signs with answers. Round percentages to one decimal place (ex. 0.0345-3.596). Round all other values to the nearest whole number. Annual Years toCoupon Issue Yield Maturity Rate Face value Proceeds Firm 1 8.00% 15 7.00% $300,000 s Firm 2 3.00% 10 0.00% s $556,853 Firm 3 6.50% 5.00% $500,000 $468,416 Firm 4 12 3.50% $1,000,000 $1,147,822 Firm 5 0.80% 20 2.00% $500,000 Check

Explanation / Answer

I have mentioned below formulae that will help you in answering all the questions

Semi annual YTM= ((F-P)/N + C) / (F+P)/2

F= Face value

P= Issue Proceeds

C= Semi-annual Coupon rate (assuming that given example interest rate mentioned is semi-annual)

N= Years to maturity

Annual YTM= (1+semi-annual YTM)^2-1

You can therefore calculate answers to every part now

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