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25 April, 08:24

High noon sun, inc. has a 5%, semiannual coupon bond with a current market price of $988.52. the bond has a par value of $1,000 and a yield to maturity of 5.29%. how many years is it until this bond matures?

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  1. 25 April, 11:41
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    The answer is 4.5 years

    Given : semi annual bond

    current market price : $988.52

    par value : $1,000

    maturity : 5.29%

    PMT = 5% x $1000 / 2 = $25,

    PV = $988.52,

    FV = $1000, and

    Int/half a year = 5.29%/2 = 2.645%.

    Solving for N = 9 (semi annual periods).

    9/2 = 4.5.
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Home » Business » High noon sun, inc. has a 5%, semiannual coupon bond with a current market price of $988.52. the bond has a par value of $1,000 and a yield to maturity of 5.29%. how many years is it until this bond matures?
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