Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Disney Enterprises issued 755 senior debentures bonds) on July 15 1993 with a 100year matu...

Disney Enterprises issued 755 senior debentures bonds) on July 15 1993 with a 100year maturity ie due on July 15 2093 Suppose an investor purchases one of these bonds on July

Disney Enterprises issued 7.55% senior debentures (bonds) on July 15, 1993, with a 100-year maturity (i.e., due on July 15, 2093). Suppose an investor purchases one of these bonds on July 15, 2003 for $1,050.

a. Determine the yield to maturity (nearest 1⁄100 of 1 percent) using the valuation formula for a bond with a finite maturity (Equation 7.5).

b. Determine the yield to maturity (nearest 1⁄100 of 1 percent) using the valuation formula for a perpetual bond (Equation 7.8).

c. Explain why the answers to parts a and b are the same.

 

 

Mar 31 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions