Homework Answers
Riverview Bond
1) Current price of Riverview Bond =
= $100* Present value Annuity Factor (15 years, 7%) + $1000* Present value of Interest Factor (15years, 7%)
= $100 * 9.108 + $1000*0.362
= $910.8 + $362 = $1272.8
2) Price of bond After 7 years =
= $100* Present value Annuity Factor (8 years, 7%) + $1000* Present value of Interest Factor (8 years, 7%)
= $100 * 5.971 + $1000*0.582
= $597.1 + $582 = $1179.1
3) Price of bond After 13 years =
= $100* Present value Annuity Factor (2 years, 7%) + $1000* Present value of Interest Factor (2 years, 7%)
= $100 * 1.808 + $1000*0.873
= $180.8 + $873 = $1053.8
Hilltop international Bond
1) Current price of Hilltop international Bond =
= $50* Present value Annuity Factor (15 years, 8%) + $1000* Present value of Interest Factor (15years, 8%)
= $50* 8.559 + $1000*0.315
= $427.95 + $315 = $742.95
2) Price of bond After 7 years =
= $50* Present value Annuity Factor (8 years, 8%) + $1000* Present value of Interest Factor (8 years, 8%)
= $50 * 5.747 + $1000*0.540
= $287.35 + $540 = $827.35
3) Price of bond After 13 years =
= $50* Present value Annuity Factor (2 years, 8%) + $1000* Present value of Interest Factor (2 years, 8%)
= $50 * 1.783 + $1000*0.857
= $89.15 + $857 = $946.15
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Your grandfather has asked you to review his investments and you are analyzing his bonds. He...
Your grandfather has asked you to review his investments and you are analyzing his bonds. He...
Your grandfather has asked you to review his investments and you are analyzing his bonds. He owns bonds from Riverview Holding and Hilltop International. Both bonds pay interest annually and have 15 years left until they mature. Riverview bonds have a 10% coupon and an 8% yield to maturity. Hilltop bonds have a 5% coupon and a 7% yield to maturity. While your grandfather owns more than one bond of each company, for this problem calculate the price of one...
Your grandfather has asked you to review his investments and you are analyzing his bonds. He...
Your grandfather has asked you to review his investments and you are analyzing his bonds. He owns bonds from Riverview Holding and Hilltop International. Both bonds pay interest annually and have 15 years left until they mature. Riverview bonds have a 10% coupon and a 5% yield to maturity. Hilltop bonds have a 5% coupon and a 10% yield to maturity. You should calculate the current price and what the price will be in the future as the bonds approach...
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Your grandfather has asked you to review his investments and you are analyzing his bonds. He owns bonds from Riverview Holding and Hilltop International. Both bonds pay interest annually and have 15 years left until they mature. Riverview bonds have a 10% coupon and an 8% yield to maturity. Hilltop bonds have a 5% coupon and a 7% yield to maturity. While your grandfather owns more than one bond of each company, for this problem calculate the price of one...
Your grandfather has asked you to review his investments and you are analyzing his bonds. He owns bonds from Riverview Holding and Hilltop International. Both bonds pay interest annually and have 15 years left until they mature. Riverview bonds have a 10% coupon and a 5% yield to maturity. Hilltop bonds have a 5% coupon and a 10% yield to maturity. You should calculate the current price and what the price will be in the future as the bonds approach...
13 #5 14 Caribbean Reef Software has 8.4 percent coupon bonds on the market with 9 years to maturity. The bonds make semiannual payments and currently sell for 95.5 percent 15 of par. What is the YTM? 16 17 #6 Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%....
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