Homework Answers
Question 21 -
I = 10,000(0.08) / 2 = $400.
Where the face value (I) = $10,000, Rate of interest (8% or 0.08), divided by 2 (Semi-annually).
The correct answer is Option (B).
Question 22 - Please complete the question.
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Question 21 (2.5 points) A mortgage bond with face value of $10,000 has a bond interest...
25 A corporate bond has a face value of $10,000, a bond interest rate of 6%...
25 A corporate bond has a face value of $10,000, a bond interest rate of 6% per year payable semiannually, and a maturity date of 20 years from now. If a person purchases the bond for $9000 when the interest rate in the marketplace is 8% per year, compounded semiannually. the size and frequency of the interest payments the person will receive are closest to (2.5 Points) 5400 every 6 months $270 every 6 months $360 every 6 months $300...
Part 1 (2.5 points) See Hint You purchased an IBM bond with a face value of $10,000...
Part 1 (2.5 points)
See Hint
You purchased an IBM bond with a face value of $10,000 and an
interest rate of 25%. Suddenly, the market interest rate changes,
which raises your bond price by $600.
What was the original price of the bond? (Compute this answer to
two decimal places.)
Part 2 (2.5 points)
See Hint
What is the new market interest rate? (Compute this answer to
two decimal places.)
We were unable to transcribe this imageWe were unable...
10.0 Points Question 3 of 10 A ten-year $10,000 face value bond with semi-annual coupon payments has an 8% annual c...
10.0 Points Question 3 of 10 A ten-year $10,000 face value bond with semi-annual coupon payments has an 8% annual coupon rate and a 9% annual YTM. It is selling for 93.45% of par. What are the semi-annual interest payments? A $40 B. 5400 C. 5450 D. 5800 Answer Key B
Compare the alternatives shown below on the basis of their capitalized costs, using an effective rate...
Compare the alternatives shown below on the basis of their capitalized costs, using an effective rate 3% per quarter compounded quarterly Calculate the Capitalized Cost for each alternative and select the best option. Do not select until you have calculated the Capitalized Cost for each alternative. Alternative A Alternative B First Cost in $ -350,000 -700,000 Quarterly income, $/quarter +55,000 +45,000 Salvage value, $ +50,000 0.00 Life, in quarters 12 quarters Select Alternative A with CCA= +$778,733 Select Alternative B...
A $10,000 mortgage bond with a bond Interest rate of 18% per year, payable quarterly, was...
A $10,000 mortgage bond with a bond Interest rate of 18% per year, payable quarterly, was purchased for SABO. The bond was kept until it was due total of 5 years. What is correct equation (PWPWd-) to calculate the rate of return "1" made by the purchaser of the bond? -10,000+ 900(P/A, 1.20) + 10,000/P/F, ".201-0 -8,800 900(P/A 1,10) +10,000/P/F, 1", 10)-0 -8.800 +1800(P/A, 14.5) +10,000{P/F, 1.51-0 -5,800 +450{P/A. 1.20) +10.000{P/F, 11.201-0 ROR Analysis _Single Project Select the "best answer...
Question 3 (4 points) A bond with a $1000 face value and an 4 percent coupon...
Question 3 (4 points) A bond with a $1000 face value and an 4 percent coupon pays interest semiannually. The bond will mature in 20 years. The nominal yield to maturity is 14 percent. What is its value? If the market rate (yield) on a bond is less than its coupon rate (and remains that way), the value of that bond will always be below its par value until the bond matures, when its value will equal par.
Question 2 (25 points) A mortgage bond issued by Automation Engineering is for sale for $8,500....
Question 2 (25 points) A mortgage bond issued by Automation Engineering is for sale for $8,500. The bond has a face value of $12,000 with a coupon rate of 8% per year, payable semiannually. What semiannual rate of return will be realized if the purchaser holds the bond to maturity 5 years from now?
Question 2 (25 points) A mortgage bond issued by Automation Engineering is for sale for $8,500....
Question 2 (25 points) A mortgage bond issued by Automation Engineering is for sale for $8,500. The bond has a face value of $12,000 with a coupon rate of 8% per year, payable semiannually. What semiannual rate of return will be realized if the purchaser holds the bond to maturity 5 years from now?
A bond that has a $1,000 par value (face value) and a contract or coupon interest...
A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11.1 percent that is paid semiannually. The bond is currently selling for a price of $1,126 and will mature in 10 years. The firm's tax rate is 34 percent. The after tax cost of debt from the firm is ____%
M. Poirot wishes to sell a bond that has a face value of $1,000. The bond...
M. Poirot wishes to sell a bond that has a face value of $1,000. The bond bears an interest rate of 9.07% with bond interest payable semiannually. Six years ago, $1,085 was paid for the bond. At least a 12% return (yield) on the investment is desired. The minimum selling price must be: Enter your answer as follow: 1234.56
25 A corporate bond has a face value of $10,000, a bond interest rate of 6% per year payable semiannually, and a maturity date of 20 years from now. If a person purchases the bond for $9000 when the interest rate in the marketplace is 8% per year, compounded semiannually. the size and frequency of the interest payments the person will receive are closest to (2.5 Points) 5400 every 6 months $270 every 6 months $360 every 6 months $300...
Part 1 (2.5 points)
See Hint
You purchased an IBM bond with a face value of $10,000 and an
interest rate of 25%. Suddenly, the market interest rate changes,
which raises your bond price by $600.
What was the original price of the bond? (Compute this answer to
two decimal places.)
Part 2 (2.5 points)
See Hint
What is the new market interest rate? (Compute this answer to
two decimal places.)
We were unable to transcribe this imageWe were unable...
10.0 Points Question 3 of 10 A ten-year $10,000 face value bond with semi-annual coupon payments has an 8% annual coupon rate and a 9% annual YTM. It is selling for 93.45% of par. What are the semi-annual interest payments? A $40 B. 5400 C. 5450 D. 5800 Answer Key B
Compare the alternatives shown below on the basis of their capitalized costs, using an effective rate 3% per quarter compounded quarterly Calculate the Capitalized Cost for each alternative and select the best option. Do not select until you have calculated the Capitalized Cost for each alternative. Alternative A Alternative B First Cost in $ -350,000 -700,000 Quarterly income, $/quarter +55,000 +45,000 Salvage value, $ +50,000 0.00 Life, in quarters 12 quarters Select Alternative A with CCA= +$778,733 Select Alternative B...
A $10,000 mortgage bond with a bond Interest rate of 18% per year, payable quarterly, was purchased for SABO. The bond was kept until it was due total of 5 years. What is correct equation (PWPWd-) to calculate the rate of return "1" made by the purchaser of the bond? -10,000+ 900(P/A, 1.20) + 10,000/P/F, ".201-0 -8,800 900(P/A 1,10) +10,000/P/F, 1", 10)-0 -8.800 +1800(P/A, 14.5) +10,000{P/F, 1.51-0 -5,800 +450{P/A. 1.20) +10.000{P/F, 11.201-0 ROR Analysis _Single Project Select the "best answer...
Question 3 (4 points) A bond with a $1000 face value and an 4 percent coupon pays interest semiannually. The bond will mature in 20 years. The nominal yield to maturity is 14 percent. What is its value? If the market rate (yield) on a bond is less than its coupon rate (and remains that way), the value of that bond will always be below its par value until the bond matures, when its value will equal par.
Question 2 (25 points) A mortgage bond issued by Automation Engineering is for sale for $8,500. The bond has a face value of $12,000 with a coupon rate of 8% per year, payable semiannually. What semiannual rate of return will be realized if the purchaser holds the bond to maturity 5 years from now?
Question 2 (25 points) A mortgage bond issued by Automation Engineering is for sale for $8,500. The bond has a face value of $12,000 with a coupon rate of 8% per year, payable semiannually. What semiannual rate of return will be realized if the purchaser holds the bond to maturity 5 years from now?
M. Poirot wishes to sell a bond that has a face value of $1,000. The bond bears an interest rate of 9.07% with bond interest payable semiannually. Six years ago, $1,085 was paid for the bond. At least a 12% return (yield) on the investment is desired. The minimum selling price must be: Enter your answer as follow: 1234.56
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