Question

Chapter 6, Question #7

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019 and the bonds have a par value of $2,000. 1.11 points 8 01:44:16 Company (Ticker) Coupon Xenon, Inc. (XIC) 7.000 Kenny Corp. (KCC) 7.280 Williams Co. ?? (WICO) Maturity Jan 15, 2039 Jan 15, 2038 Jan 15, 2045 Last Price 94.343 ?? 94.895 Last Yield ?? 5.46 716 EST $ Vol (000's) 57,378 48,957 43,818 Skipped eBook Print a. What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the bond's current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) References a. Price b. Current yield

Answer 1

C12 =PV(C9,C7,C5,C2)*-1 A В C $ 2 1 Face value (FV) 100 3 7.28% 2 Coupon rate 3 Number of compounding periods per year 5 4 1*2/3 Interest per period (PMT) $ 7.28 5 Number of years to maturity Number of compounding periods till maturity 6 3*5 (NPER) 7 Market rate of return/Required rate of return Market rate of return/Required rate of return 8 7/3 per period (RATE) Bonds price 19 7 19 8 5.46% 9 5.46% 10 PV(RATE,NPER, PMT,FV)*-1 11 Bonds price 121.19 12 13 Current yield Bond annual coupons Bond price 14 Current yield 6.01% 15 LO

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