Homework Answers
Current value=Annual coupon*Present value of annuity factor(7%,9)+$1000*Present value of discounting factor(7%,9)
1065.15=Annual coupon*6.515232249+1000*0.543933742
Annual coupon=(1065.15-543.933742)/6.515232249
=80(Approx).
Coupon rate=Annual coupon/Face value
=80/$1000
=8%
NOTE:
1.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=Annual coupon[1-(1.07)^-9]/0.07
=Annual coupon*6.515232249
2.Present value of discounting factor=1000/1.07^9
=1000*0.543933742
Add Answer to:
Problem 6-15 Bond Pricing (LO2) Maxcorp's bonds sell for $1,065.15. The bond life is 9 years,...
Large Industries bonds sell for $1.091.90. The bond life is 15 years, and the yield to...
Large Industries bonds sell for $1.091.90. The bond life is 15 years, and the yield to maturity is 8.4% What must be the coupon rate on the bonds? Assume coupons are paid once a year and the face value is $1,000. (Do not found intermediate calculations Enter your response as a percentage rounded to one decimal place.) Coupon rate
Problem 6-8 Bond Pricing (LO2) A 5-year Circular File bond with a face value of $1,000...
Problem 6-8 Bond Pricing (LO2) A 5-year Circular File bond with a face value of $1,000 pays interest once a year of $60 and sells for $988. a. What are its coupon rate and yield to maturity? (Do not round intermediate calculations. Enter the coupon rate as a whole percent and the yield to maturity as a percent rounded to 2 decimal places.) Coupon rate Yield to maturity b. If Circular wants to issue a new 6-year bond at face...
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000...
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 7.8%. Now, with 8 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 15%. What is the price of the bond now? (Assume semiannual coupon payments.) (Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond price b....
How do you enter in the calculator? Problem 6-4 Bond Yields (LO 2] The Petit Chef...
How do you enter in the calculator?
Problem 6-4 Bond Yields (LO 2] The Petit Chef Co. has 10.4 percent coupon bonds on the market with seven years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,119.34, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity %
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.9%, and sells for $1,110. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 9.1% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 7.5%, and sells for $1,150. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 10.5% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...
You buy a bond for $997 that has a coupon rate of 6.30% and a maturity...
You buy a bond for $997 that has a coupon rate of 6.30% and a maturity of 6-years. A year later, the bond price is $1,192. (Assume a face value of $1,000 and annual coupon payments.) a. What is the new yield to maturity on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is your rate of return over the year? (Do not round intermediate calculations. Enter your...
You buy a bond for $985 that has a coupon rate of 5.50% and a maturity...
You buy a bond for $985 that has a coupon rate of 5.50% and a maturity of 8-years. A year later, the bond price is $1,160. (Assume a face value of $1,000 and annual coupon payments.) a. What is the new yield to maturity on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is your rate of return over the year? (Do not round intermediate calculations. Enter your...
The following table shows some data for three zero-coupon bonds. The face value of each bond is $1,000. Bond Maturity (...
The following table shows some data for three zero-coupon bonds. The face value of each bond is $1,000. Bond Maturity (Years) Yield to Maturity Price $ 380 380 B 10% a. What is the yield to maturity of bond A? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Assume annual compounding.) Yield to maturity b. What is the maturity of B? (Do not round intermediate calculations. Round your answer to 2 decimal...
Problem 6-5 Bond Pricing (LO1, 2) A General Power bond carries a coupon rate of 9.7%,...
Problem 6-5 Bond Pricing (LO1, 2) A General Power bond carries a coupon rate of 9.7%, has 9 years until maturity, and sells at a yield to maturity of 8.7%. (Assume annual Interest payments.) a. What interest payments do bondholders recelve each year? $ 97 b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places) c. what will happen to the bond price if the yield to maturity falls to...
Large Industries bonds sell for $1.091.90. The bond life is 15 years, and the yield to maturity is 8.4% What must be the coupon rate on the bonds? Assume coupons are paid once a year and the face value is $1,000. (Do not found intermediate calculations Enter your response as a percentage rounded to one decimal place.) Coupon rate
Problem 6-8 Bond Pricing (LO2) A 5-year Circular File bond with a face value of $1,000 pays interest once a year of $60 and sells for $988. a. What are its coupon rate and yield to maturity? (Do not round intermediate calculations. Enter the coupon rate as a whole percent and the yield to maturity as a percent rounded to 2 decimal places.) Coupon rate Yield to maturity b. If Circular wants to issue a new 6-year bond at face...
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 7.8%. Now, with 8 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 15%. What is the price of the bond now? (Assume semiannual coupon payments.) (Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond price b....
How do you enter in the calculator?
Problem 6-4 Bond Yields (LO 2] The Petit Chef Co. has 10.4 percent coupon bonds on the market with seven years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,119.34, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity %
The following table shows some data for three zero-coupon bonds. The face value of each bond is $1,000. Bond Maturity (Years) Yield to Maturity Price $ 380 380 B 10% a. What is the yield to maturity of bond A? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Assume annual compounding.) Yield to maturity b. What is the maturity of B? (Do not round intermediate calculations. Round your answer to 2 decimal...
Problem 6-5 Bond Pricing (LO1, 2) A General Power bond carries a coupon rate of 9.7%, has 9 years until maturity, and sells at a yield to maturity of 8.7%. (Assume annual Interest payments.) a. What interest payments do bondholders recelve each year? $ 97 b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places) c. what will happen to the bond price if the yield to maturity falls to...
Most questions answered within 3 hours.
-
Test the claim that the proportion of people who own cats is
smaller than 50% at...
asked 7 minutes ago -
Question 1 Continues
*** This is the NODE ADT you need. I hope this will help...
asked 9 minutes ago -
Show the rearrangements of the carbon skeleton in the following
carbocations. Note that in some cases...
asked 2 hours ago -
Use a z -Table to find the specified area.
Between the mean and 3.01 deviations from...
asked 2 hours ago -
Consider the following reaction at equilibrium. What will happen
if O2 is added to the reaction?...
asked 3 hours ago -
Based on how much or how little you have noticed in the media,
do you think...
asked 6 hours ago -
I calculate Rosetta Stone’s P/E ratio as 10x prior to a report
about future industry growth....
asked 7 hours ago -
What major physiological changes account for electrodermal
activity (as in during a lie-detector test)?
asked 8 hours ago -
You are going to sell fruits & vegetables at a local
roadside market. List separately and...
asked 8 hours ago -
Hows does water affect the digestion of fats ?
asked 11 hours ago -
A buffer that contains 0.41 M of a base, B and 0.21 M of its
conjugate...
asked 11 hours ago -
Pleaaaaaaaasssssse help me please please it's more important
:((((((((((((((((((((
CASE STUDY
Nissan Company
Nissan Motor Company,...
asked 11 hours ago