Homework Answers
Answer : 1018.59
The life on bond = 1 year and the current market rate = YTM = 10%
check row 3 and column C
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Twenty-five-year B-rated bonds of Parker Optical Company were initially issued at a 12 percent yield. After...
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...
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 25 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 $1,015. Further assume Ms. Bright paid 40 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...
2. A $1,000 par value bond was issued 15 years ago at a 12 percent coupon...
2. A $1,000 par value bond was issued 15 years ago at a 12 percent coupon rate. It currently has 25 years remaining to maturity. Interest rates on similar obligations are now 10 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,025. Further assume Ms. Bright paid 20 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond...
Nungesser Corporation has issued bonds that have a 9 percent coupon rate, payable semiannually. The bonds...
Nungesser Corporation has issued bonds that have a 9 percent coupon rate, payable semiannually. The bonds mature in 6 years, have a face value of $1,000, and a yield to maturity of 8.5 percent. Current Market Price = PV(Rate,Nper,PMT,FV) 1). What is the price of the bonds? $1,023.13 2). What is the current yield? 8.80% 3). What is the capital gains yield? -0.30% 4). These bonds sell at a. par b. a premium c. a discount Please type out all...
Refer to Table 10-1, assume interest rates in the market (yield to maturity) are 9 percent...
Refer to Table 10-1, assume interest rates in the market (yield to maturity) are 9 percent for 20 years on a bond paying 10 percent a. What is the price of the bond? Bond price b. Assume 15 years have passed and interest rates in the market have gone up to 12 percent. Now, using Table 10-2 for 5 years, what is the price of the bond? Bond price nces c. What would your percentage return be if you bought...
par value bonds
1.A 30-year, $1,000 par value bond has a 9.5% annual payment coupon. The bond currently sells for $875. If the yield to maturity remains at its current rate, what willthe price be 9 years from now?2.Knapp Bros, LLC is planning to issue new 20-year bonds. The current plan is to make the bonds non-callable, but this may be changed. If the bonds are made callableafter 7 years at a 7% call premium, how would this affect their required rate of...
6. General Electric Incorporated issued a 30 year zero-coupon bond. If comparable AA rated bonds yield...
6. General Electric Incorporated issued a 30 year zero-coupon bond. If comparable AA rated bonds yield 7.8%, what is the price of bond? (Discount at an annual rate) (a) $1,000.00 (b) $ 0.00 (c) $1,050.60 (d) $ 105.06 (e) $ 780.00
1. (Holding Period Yield) A few years ago, XYZ Corp. issued a bond with a par...
1. (Holding Period Yield) A few years ago, XYZ Corp. issued a bond with a par value of $1000 and annual coupon rate of 7 percent paid SEMIANNUALLY (2 times per year). At present (time 0), the bond has 20 years to maturity. a. If the yield to maturity (YTM) on this bond is now 10 percent, what is the current price of the bond (at time 0)? In your answer, please indicate your entries: N = I/Y= FV =...
Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years....
Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 16 percent to 9 percent. a. What is the bond price at 16 percent? Bond price b. What is the bond price at 9 percent? Bond price c. What would be your percentage return on investment if you bought when rates were 16 percent and sold when rates were 9 percent? (Do not...
6. General Electric Incorporated issued a 30 year zero-coupon bond. If comparable AA rated bonds yield...
6. General Electric Incorporated issued a 30 year zero-coupon bond. If comparable AA rated bonds yield 7.8%, what is the price of bond? (Discount at an annual rate) (a) $1,000.00 (b) $ 0.00 (c) $1,050.60 (d) $ 105.06 (e) $ 780.00 7. A bond with a bond rating of BBB or higher by Standard and Poor's, or Baa or higher by Moody's is referred to as being what type of bond (a) investment grade (b) subordinated (c) debenture (d) mortgage...
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...
A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has 25 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 $1,015. Further assume Ms. Bright paid 40 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...
2. A $1,000 par value bond was issued 15 years ago at a 12 percent coupon rate. It currently has 25 years remaining to maturity. Interest rates on similar obligations are now 10 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,025. Further assume Ms. Bright paid 20 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond...
Refer to Table 10-1, assume interest rates in the market (yield to maturity) are 9 percent for 20 years on a bond paying 10 percent a. What is the price of the bond? Bond price b. Assume 15 years have passed and interest rates in the market have gone up to 12 percent. Now, using Table 10-2 for 5 years, what is the price of the bond? Bond price nces c. What would your percentage return be if you bought...
1. (Holding Period Yield) A few years ago, XYZ Corp. issued a bond with a par value of $1000 and annual coupon rate of 7 percent paid SEMIANNUALLY (2 times per year). At present (time 0), the bond has 20 years to maturity. a. If the yield to maturity (YTM) on this bond is now 10 percent, what is the current price of the bond (at time 0)? In your answer, please indicate your entries: N = I/Y= FV =...
Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 16 percent to 9 percent. a. What is the bond price at 16 percent? Bond price b. What is the bond price at 9 percent? Bond price c. What would be your percentage return on investment if you bought when rates were 16 percent and sold when rates were 9 percent? (Do not...
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