Question

Hershey Co. is offering a bond with a 4.45% coupon interest rate, a par value of $1,000, and a market price of $850. What is

SHOW STEP BY STEP SOLUTION ANSWER IS 5.29%

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Current Yield = Coupon Payment/Bond Price

Current Yield = 44.50/850

Current Yield = 5.29%

Add a comment
Know the answer?
Add Answer to:
SHOW STEP BY STEP SOLUTION ANSWER IS 5.29% Hershey Co. is offering a bond with a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • please show how to compute with a financial calculator. thank you! Bond Valuation Exercises: OM Question...

    please show how to compute with a financial calculator. thank you! Bond Valuation Exercises: OM Question 1. GTF Corporation has 5 percent coupon bonds on the market with a par of $1,000 and 10 years left to maturity. The bonds make annual interest payments. If the market interest rate on these bonds is 7 percent, what is the current bond price? Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8...

  • please answer both and show work! Calculate the current price of a $5,000 par value bond...

    please answer both and show work! Calculate the current price of a $5,000 par value bond that has a coupon rate of 20 percent, pays coupon interest quarterly (i.e. 4 times per year), has 22 years remaining to maturity, and has a current yield to maturity (discount rate) of 8 percent. (Round your answer to 2 decimal places and record without dollar sign or commas). Calculate the current price of a $1,000 par value bond that has a coupon rate...

  • Need all parts answered step by step. Rick bought a bond when it was issued by...

    Need all parts answered step by step. Rick bought a bond when it was issued by Macroflex Corporation ago. 10 percent, matures in six years. Interest is paid every six months; the next inter- est payment is scheduled for six months from today. If the yield on similar risk investments is 14 percent, what is the current market value (price) of the bond? 14 years Bond Valuation ond's The bond, which has a $1,000 face value and a coupon rate...

  • Bond Bond Value Current Yield Bond A Bond B Bond C Discount Rate 5.00% 15.00% 15.60%...

    Bond Bond Value Current Yield Bond A Bond B Bond C Discount Rate 5.00% 15.00% 15.60% Roen is planning to invest in five-year, 15% annual coupon bonds with a face value of $1,000 each. Complete the table by calculating the value of each bond and the current yields at the various discount rates. There is a distinct relationship between the coupon rate, the discount rate, and a bond's price relative to its par value. Based on your preceding calculations, complete...

  • show all work Mr. Bond is considering purchasing a bond with 10-year maturity and $1,000 face...

    show all work Mr. Bond is considering purchasing a bond with 10-year maturity and $1,000 face value. The coupon interest rate is 8% and the interest is paid annually. If Mr. Bond requires 12% yield to maturity on the investment, then, what is price of the bond ? You have just purchased a 5-year, $1,000 par value bond. The coupon rate on this bond is 12%, and the interest is paid annually. If you expect to eam a 10 percent...

  • 2. There are two bonds that a bond fund manager is considering. Bond A has a...

    2. There are two bonds that a bond fund manager is considering. Bond A has a coupon rate of 5% and Bond B has a coupon rate of 8 %. Both bonds are paying interest semi-annually, have a par value of $1,000 anda maturity of 20 years. If the current YTM for both bonds is 6%, what is their current price? If the YTM changed to 7% , what would be their new current price? Which bond is more elastic...

  • Yield to maturity a spreadsheet.) The bond shown in the following table pays interest annually. (Click...

    Yield to maturity a spreadsheet.) The bond shown in the following table pays interest annually. (Click on the icon here in order to copy the contents of the data table below into Coupon interest rate Years to maturity Par value $1,000 Current value $1,230 a. Calculate the yield to maturity (VTM) for the bond b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a bond? Explain a. The...

  • A bond has a par value of $1,000, a current yield of 8.15 percent, and semiannual coupon payments. The bond is quoted at 103.51. What is the coupon rate of the bond?

    1. A bond has a par value of $1,000, a current yield of 8.15 percent, and semiannual coupon payments. The bond is quoted at 103.51. What is the coupon rate of the bond?2. Kasey Corp. has a bond outstanding with a coupon rate of 5.94 percent and semiannual payments. The bond has a yield to maturity of 5.1 percent, a par value of $2,000, and matures in 20 years. What is the quoted price of the bond?3. A bond with...

  • Problem 16-1 Bond yields [LO2] The Pioneer Petroleum Corporation has a bond outstanding with an $85...

    Problem 16-1 Bond yields [LO2] The Pioneer Petroleum Corporation has a bond outstanding with an $85 annual interest payment, a market price of $800, and a maturity date in five years. Assume the par value of the bond is $1,000. Find the following: (Use the approximation formula to compute the approximate yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Input variables: Annual interest Market price Maturity date Par value...

  • BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual...

    BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual coupon rate and a 10-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.3%. If Janet sold the bond today for $1,026.98, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places. % BOND VALUATION Madsen Motors's bonds have 12 years remaining to...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT