- +44 141 628 6080
- [email protected]

Develop a valuation model for the long-term corporate bond

Develop a valuation model for the long-term corporate bond with a face value at maturity of $100,000, a maturity of 10 years, a coupon interest rate of 6%, and a market yield of 8%. The coupons are assumed to be paid semi-annually. In your development and presentation, include a time line showing the relevant cash flows along with all of the steps that allow you to generate the value (price of the bond).

Given the problem above, identify how the bond price will be expected to adjust across time as the bond approaches maturity. You should calculate the price after each 2-year period has passed - i.e., after year 2, year 4, year 6, year 8 and year 10. Graph the resulting movement in the price across time using the resulting values. Explain how this movement in the bond price across time is important for the investor.

Expected delivery within 24 Hours

1948152

Questions

Asked

3,689

Active Tutors

1460854

Questions

Answered

**
Start Excelling in your courses, Ask a tutor for help and get answers for your problems !! **

Â©TutorsGlobe All rights reserved 2022-2023.

## Q : You are offered a choice between 770 today and 815 one year

you are offered a choice between 770 today and 815 one year from today assume that interest rates are 4 percent which