Waco Industries 15-year, $1,000 par value bonds pat 8 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is 10 percent.
a. Compute the bond’s expected rate of return.
b. Determine the value of the bond to you, given your required rate of return.
c. Should you purchase the bond?
Bond's 的問題
2008-04-07 7:42 pm
回答 (2)
2008-04-08 6:14 pm
✔ 最佳答案
a) Assume r% be the expected rate of return. Equate 1,085=80/(1+r%)+80/(1+r%)^2 + 80/(1+r%)^3 +.....+80/(1+r%)^14+1,080/(1+r%)^15, you can find r. b) Value of the bond = 80/(1+10%) + 80/(1+10%)^2 + 80(1+10%)^3+....+80/(1+10%)^14+1,080/(1+10%)^15.c) It is obvious that the bond expected rate of return is SMALLER than your required rate of return, you should not purchase the bond.2008-04-09 10:08:42 補充：
If you have a financial calculator, you just input P=1,085, c=80, n=15 and F=1,000, you can find r.
2008-04-09 6:37 am
答得好好...但係想問下part a果陣應該要點solve ??
收錄日期: 2021-04-13 15:24:18
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