Solved: The bonds have a coupon rate of 288 and a yield to maturity, Finance Basics

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The bonds have a coupon rate of 288 and a yield to maturity

Microsoft has outstanding bonds of $2,250,000,000 that mature in 20 years. The bonds have a Coupon rate of 2.88% and a Yield to Maturity of 2.84%. The bonds pay interest semi-annually. Answer the following:

1. How much interest is paid to bondholders every 6 months?

2. What is the present value of the bond?

3. Flash forward 5 years, now the bonds have 15 year to maturity. Microsoft is considering issuing new bonds and buying the original bonds back. The market rate of interest is now 3.0%. What is the present value of the bonds now?

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Finance Basics: The bonds have a coupon rate of 288 and a yield to maturity

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Finance Basics: The bonds have a coupon rate of 288 and a yield to maturity

Reference No:- TGS02667855

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