Many years ago, Topnotch Knives issued a zero coupon bond with a $1,000 face value. The...
- Many years ago, Topnotch Knives issued a zero coupon bond with a $1,000 face value. The bond matures in three years. If the current mar- ket rate on similar bonds is 11 percent, (a) what is the bond’s current value? Suppose the market rate stays at 11 percent for the next three years. What (b) current yield and (c) capital gains yield will bondholders receive each year during the remainder of the bond’s life?
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Many years ago, Topnotch Knives issued a zero coupon bond with
a $1,000 face value. The...
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....
6-5 Eleven years ago, Elite Elements issued a 15-year bond with a $1,000 face value and...
6-5 Eleven years ago, Elite Elements issued a 15-year bond with a $1,000 face value and a 5 percent coupon rate of interest (paid semiannually). If investors require a return equal to 7 percent to invest in similar bonds, what is the current market value of Elite's bond?
A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate....
A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has 15 years remaining to maturity. Interest rates on similar obligations are now 8 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,050. Further assume Ms. Bright paid 30 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond to...
Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a...
Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a current market price of $989, and a 5 percent coupon. Which one of the following statements is correct concerning this bond? Multiple Choice The current coupon rate is greater than 5 percent. The bond is a money market instrument. The bond will pay less annual interest now than when it was originally issued. The current yield exceeds the coupon rate. The bond will pay...
A zero coupon bond has a face value of $1,000 and matures in 6 years. Investors...
A zero coupon bond has a face value of $1,000 and matures in 6 years. Investors require a(n) 7.2 % annual return on these bonds. What should be the selling price of the bond? If the nominal rate of interest is 12.21 % and the real rate of interest is 8.76 % what is the expected rate of inflation? A Ford Motor Co. coupon bond has a coupon rate of 6.75%, and pays annual coupons. The next coupon is due...
ond 0-2 Rick bought a bond when it was issued by Macroflex Corporation 14 years ago....
ond 0-2 Rick bought a bond when it was issued by Macroflex Corporation 14 years ago. The bond, which has a $1,000 face value and a coupon rate equal to 10 percent, matures in six years. Interest is paid every six months; the next inter- est payment is scheduled for six months from today. If the yield on similar risk investments is 14 percent, what is the current market value (price) of the bond? 10-3
Two years ago, Synergy Inc. issued a 15-year callable bond with a $1,000 face value and a 12 percent coupon rate of inte...
Two years ago, Synergy Inc. issued a 15-year callable bond with a $1,000 face value and a 12 percent coupon rate of interest (paid semiannually). The bond cannot be called until five years after issue, at which time the call price will equal $1,120. Currently, the bond is selling for $989.What is the bond's yield to call (YTC).
A government bond with a face value of $1,000 was issued eight years ago there are...
A government bond with a face value of $1,000 was issued eight years ago there are seven years remaining unit maturity. The bond pays semi-annual coupon payments of $45, the coupon rate is 9% p.a. paid twice yearly and rate in the marketplace are 9.6% p.a. compounded semi annually. What is the value of the bond today?
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 7%. N...
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 7%. 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 price of the bond now? (Assume semiannual coupon payments.) (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Bond price 5 641,01 b....
A $1,000 par value bond was issued five years ago at a 8 percent coupon rate....
A $1,000 par value bond was issued five years ago at a 8 percent coupon rate. It currently has 7 years remaining to maturity. Interest rates on similar debt obligations are now 10 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. A. Compute the current price of the bond using an assumption of semiannual payments. B. If Mr. Robinson initially bought the bond at par value,...
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....
6-5 Eleven years ago, Elite Elements issued a 15-year bond with a $1,000 face value and a 5 percent coupon rate of interest (paid semiannually). If investors require a return equal to 7 percent to invest in similar bonds, what is the current market value of Elite's bond?
A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has 15 years remaining to maturity. Interest rates on similar obligations are now 8 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,050. Further assume Ms. Bright paid 30 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond to...
ond 0-2 Rick bought a bond when it was issued by Macroflex Corporation 14 years ago. The bond, which has a $1,000 face value and a coupon rate equal to 10 percent, matures in six years. Interest is paid every six months; the next inter- est payment is scheduled for six months from today. If the yield on similar risk investments is 14 percent, what is the current market value (price) of the bond? 10-3
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 7%. 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 price of the bond now? (Assume semiannual coupon payments.) (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Bond price 5 641,01 b....
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