1.
The bond price is less than 1000 because coupon rate is less than
yield to maturity
If coupon rate is more than yield to maturity, bond price is
more than par value
If coupon rate is less than yield to maturity, bond price is less
than par value
If coupon rate is equal to yield to maturity, bond price is equal
to par value
2.
N=10*2=20
PMT=-8%*1000/2=-40
FV=-1000
I/Y=9%/2=4.5%
CPT PV=934.960318
3.
N=10*2=20
PMT=8%*1000/2=40
PV=-990
FV=1000
CPT I/Y=4.07407%
Yield to maturity=4.07407%*2=8.14814%
Please help with part 1, #1,2,3 CF/(1+r) - INV vestment the questions 1. Based on the...
please help with part 2, # 1)
and 2)
CF/(1+r) - INV vestment the questions 1. Based on the following information, answer the questions, 1) Facebook issued 10-year bonds with a par value of $1,000 and a coupon rate of 8%, paid semiannually, 1) Suppose that the yield to maturity on this bond is 10%. Is the bond price greater or less than $1,000? You can use the relationship between the coupon rate and the yield to maturity. (30points) II)...
2) Google has just paid a dividend of $5.00 on its stock. Its dividends are expected to grow at a 20 percent rate for the next two years (Year 2021 and 2022), with the growth rate falling off to a 10 percent thereafter (from Year 2023). I) What is the dividend at Year 2023? (30points) Î Î Î II) Given the required return of 30 percent, figure out the stock price in 2022 (SP). (30points) 소소t III) Given the required...
A bond has the following terms: January 1, 2000, settlement date January 1, 2020, maturity date 10 percent semiannual coupon 12 percent yield $100 redemption value Frequency is semiannual 30/360 basis =PRICE("1/1/2000","1/1/2020",10%,12%,100,2,0)=84.954 Bond Problems 1. Calculate the price of a 20-year 10% coupon bond with a par value of $1,000. The bond should be price to provide a yield to maturity of 11%. Interest payments are paid semiannually. 2. Calculate the price of a 20-year 10% coupon bond with a...
questions 1-6 using financial
calculator when possible
1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10 years at $1,000. If the investor's required rate of return is 14 percent, what should the current market price of the bonds be? 2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50 annually. The par value of each preferred share is $100. Investors require a 12.25 percent rate of return...
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...
1. What is a bond? 2. Does a zero-coupon bond pay interest? Explain your answer. 3. Endicott Enterprises Inc. has issued thirty-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 14% and the current yield to maturity is 8%, what is the firm’s current price per bond? 4. Delagold Corporation is issuing a zero-coupon bond that will have a maturity of fifty years. The bond’s par value is $1,000, and the current yield...
1. Troy is interested in buying a particular stock whose current dividend is $1.35, and whose dividend is expected to increase at a rate of 5% per year for two years, and then at 2.5% per year thereafter forever. Which of the following comes closest to an estimate of the price per share of the stock if the required rate of return is 13.40%. 2. You are trying to price two bonds that have the same maturity and par value...
please explain how to calculate in a financial
calculator
Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8 years left to maturity. The bonds make semi-annual interest payments. If the market interest rate on these bonds is 6 percent, what is the current bond price? Question 3. Jones Corporation has zero coupon bonds on the market with a par of $1,000 and 8 years left to maturity. If the market...
1. The current dividend yield on Clayton's Metals common stock is 3.2 percent. The company just paid a $1.48 annual dividend and announced plans to pay $1.54 next year. The dividend growth rate is expected to remain constant at the current level. What is the required rate of return on this stock? 7.25 percent 7.82 percent 8.08 percent 8.75 percent 8.39 percent 2. Which one of the following is computed by dividing next year's annual dividend by the current stock...
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Chapter 14 0 Saved Help Save & Exit Submit Check my work 12 A 2-year bond with par value $1,000 making annual coupon payments of $122 is priced at $1,000. a. What is the yield to maturity of the bond? (Round your answer to 1 decimal place.) points Yield to maturity % eBook Print References b. What will be the realized compound yield to maturity if the 1-year interest rate next year turns...