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Economics
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23 Nov 2019

Chuck purchased a corporate bond was purchased for $8,950. The face value of the bond is $10,000 and matures after 10 years. The bond pays a 13% interest with quarterly dividends. Determine the effective interest rate that Chuck would receive when the bond matures, if it has paid dividends as scheduled.

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Jean Keeling
Jean KeelingLv2
16 Jan 2019
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Related questions

A corporate bond has a face value of $10,000 with a bond rate of 6%. The interest of the bond will be paid quarterly. The bond will mature in 10 years. If the bond is sold at $7,000 on the market, what is the yield (return) on the bond?

A bond that matures in 19 years has a $1,000 par value. The annual coupon interest rate is 12 percent and the market's required yield to maturity on a comparable-risk bond is 14 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?

4. (4 points)
(a) Assume that a one year bond that has no interest coupon payment with a maturity value (face value) of $1,000 sold for $900. Show the interest rate that this bond will pay when it matures.
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