Bond Assignment | Professional Writing
May 20th, 2020
Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 10%. Would you pay $879 for each bond if you thought that a “fair” market interest rate for such bonds was 13%—that is, if rd = 13%?
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Bond Assignment | Professional Writing
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You would buy the bond as long as the yield to maturity at this price is less than your required rate of return. | ||
You would buy the bond as long as the yield to maturity at this price equals your required rate of return. | ||
You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return. | ||
You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return. | ||
You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond.
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