Homework Answers
![Answer to Q#1 (First question in the list Market interest rate, RATE # of Years to maturity, NPER Annual coupon payment, PMT Maturity value at the end, FV Annual coupon type, TYPE Bonds Market Price 3% 20 $30 [$1,000 x 3%) $1,000 [Assumed Par value of the bond] 0 =0 if coupons paid at the end of each period; 1 if coupons paid at the beginning of each period $1,000.00 [Ref: NOTE] As the market interest rate and the coupon rate are equal, this bond is sold at par (Market price Par value of the bond) NOTE Bonds Market Price is calculated using EXCEL FUNCTION PV(rate,nper,pmt,fv,type) where rate-3%; nper-20; pmt-30; fV-1000, type =0. Here, value for pmt & fv are negative as they denote cash inflows; type =0 because coupons paid at the end of each year only 1 Market interest rate, RATE 2 # of Years to maturity, NPER 3 Ann 4 Maturity value at the end, FV 5 Annual coupon type, TYPE 6 Bonds Market Price 3% 20 ual coupon payment, PMT -84*396 [$1,000 x396] $1,000 [Assumed Par value of the bond] 00 if coupons paid at the end of each period; 1 if coupons paid at the beginning of each period -PV(B1,B2,-B3,-B4,B5) [Ref: NOTE]](http://img.homeworklib.com/questions/177b77f0-725e-11ea-9f78-d5c8aea1eba5.png?x-oss-process=image/resize,w_560)
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4 part example I need help with.
Calculate the price of a bond that matures in...
1a. Calculate the price of a bond where the coupon rate is 5% (pays annually), the...
1a. Calculate the price of a bond where the coupon rate is 5% (pays annually), the market interest rate is 4%, and the life of the bond is 10 years. 1b. Suppose that you have an annual pay 7-year bond with a price of $1,100, paying a 4.5% coupon, with a face value of $1,000. What is the bond’s yield to maturity (YTM)? 1c. A bond sells for $900 today. Its coupon rate is 3%. The expected price in one...
AaBbCcD AaBbCeDdE A BbCeDdi AaBbo Str Sub Why would a corporation issue a bond (rather than...
AaBbCcD AaBbCeDdE A BbCeDdi AaBbo Str Sub Why would a corporation issue a bond (rather than stock)? 7-2 Key Characteristics of Bonds Briefly explain the cash inflows and outflows over the life of a bond from purchase until maturity from the investor's perspective. 7-3-1 Bond Valuation- Overview What is the difference between the face value and the par value of a bond? Does the investor get this amount back, and if so, at what time? 7-3-2 Bond Valuation-Example 1 Calculate...
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of...
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 6.6132%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
7.12 A 6% semiannual coupon bond matures in 4 years. The bond has a face value...
7.12
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 6.6497%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of...
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 6.5996%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond’s price: $ YTM: %
PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a...
PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.4034%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. 8.64 What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places.
1) Consider a 10-year bond trading at $1150 today. The bond has a face value of...
1) Consider a 10-year bond trading at $1150 today. The bond has a face value of $1,000, and has a coupon rate of 8%. Coupons are paid semiannually, and the next coupon payment is exactly 6 months from now. What is the bond's yield to maturity? 2)A coupon-paying bond is trading below par. How does the bond's YTM compare to its coupon rate? a. Need more info b. YTM = Coupon Rate c. YTM > Coupon Rate d. YTM <...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.2296%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
Problem 7-13 Price and yield An 8% semiannual coupon bond matures in 5 years. The bond...
Problem 7-13 Price and yield An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.1503%. What is the bond's price? Round your answer to the nearest cent. What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answers to two decimal places.
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.1899%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond’s price: $ YTM: %
AaBbCcD AaBbCeDdE A BbCeDdi AaBbo Str Sub Why would a corporation issue a bond (rather than stock)? 7-2 Key Characteristics of Bonds Briefly explain the cash inflows and outflows over the life of a bond from purchase until maturity from the investor's perspective. 7-3-1 Bond Valuation- Overview What is the difference between the face value and the par value of a bond? Does the investor get this amount back, and if so, at what time? 7-3-2 Bond Valuation-Example 1 Calculate...
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 6.6132%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
7.12
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 6.6497%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.4034%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. 8.64 What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places.
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.2296%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
Problem 7-13 Price and yield An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.1503%. What is the bond's price? Round your answer to the nearest cent. What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answers to two decimal places.
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