Homework Answers
Correct Answer:
The current market value of bond is $ 1167
Working:
|
Annual Rate |
Applicable rate |
Face Value |
$ 1,000 |
||
|
Market Rate |
6.00% |
3.00% |
Term (in years) |
5 |
|
|
Coupon Rate |
10.00% |
5.00% |
Total no. of interest payments |
10 |
Note: the Bond pays $ 50 on interest semi-annually, which is 10% interest, therefore the coupon rate will be 10% .
|
Calculation of Issue price of Bond |
||||||||
|
Bond Face Value |
Market Interest rate (applicable for period/term) |
|||||||
|
PV of |
$ 1,000 |
at |
3.00% |
Interest rate for |
10 |
term payments |
||
|
PV of $1 |
0.74409 |
|||||||
|
PV of |
$ 1,000 |
= |
$ 1,000 |
x |
0.74090 |
= |
$ 740.90 |
A |
|
Interest payable per term |
at |
5.0% |
on |
$ 1,000 |
||||
|
Interest payable per term |
$ 50 |
|||||||
|
PVAF of 1$ |
for |
3.0% |
Interest rate for |
10 |
term payments |
|||
|
PVAF of 1$ |
$ 8.53020 |
|||||||
|
PV of Interest payments |
= |
$ 50.00 |
x |
8.53020 |
= |
$ 426.51 |
B |
|
|
a |
Bond Value (A+B) |
$ 1,167 |
End of Answer.
Please give a thumbs-up, it will be highly appreciated.
Thanks
Add Answer to:
An
investor purchases a 5-year, $1,000 par value bond that pays
semiannual interest of $50. if...
An investor purchases a 9-year, $1,000 par value bond that pays semiannual interest of $45. If...
An investor purchases a 9-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
An investor purchases a 10-year , $1,000 par value bond that pays semiannual interest of $45....
An investor purchases a 10-year , $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Multiple Choice $828 $878 $1,000 О O $1,516
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If...
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice Ο $1000. Ο Ο Ο $881.
An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $45. If...
An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Ο $969. Ο $1,000. Ο $931. Ο $1,621.
An investor purchases a 7-year $1,000 par value bond that pays semiannual interest of $40. If...
An investor purchases a 7-year $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Multiple Choice 0 $901. 0 $944. O S1000
please complete both required parts of the question Exercise 5-17 (Algo) Price of a bond; interest...
please complete both required parts of the question
Exercise 5-17 (Algo) Price of a bond; interest expense (LO5-9,5-10) On June 30, 2021, Singleton Computers issued 6% stated rate bonds with a face amount of $300 million. The bonds mature on June 30, 2036 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (3.0%) on June 30 and December 31, beginning on December 31, 2021. (FV of $1. PV of...
please complete the question Check my work Brief Exercise 5-4 (Algo) Present value; single amount (LO5-3]...
please complete the question
Check my work Brief Exercise 5-4 (Algo) Present value; single amount (LO5-3] points John has an investment opportunity that promises to pay him $13,000 in four years. He could earn a 4% annual return investing his money elsewhere. (FV of $1. PV of St FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Skipped What is the maximum amount he would be willing to invest...
please compelte the question Brief Exercise 5-3 (Algo) Future value; solving for unknown; single amount (L05.4)...
please compelte the question
Brief Exercise 5-3 (Algo) Future value; solving for unknown; single amount (L05.4) Bill O'Brien would like to take his wife, Mary, on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $25,500 inheritance from an uncle and intends to invest it for the trip. Bill estimates the trip will cost $32,130. FV of $5 PV of $1, FVA of $1. PVA of $1. EVAD of $1 and...
Exercise 5-13 (Static) Solving for unknowns; annuities (LO5-9) For each of the following situations involving annuities,...
Exercise 5-13 (Static) Solving for unknowns; annuities (LO5-9) For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (/= interest rate, and n=number of years) (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar...
An investor purchases a 9-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
An investor purchases a 10-year , $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Multiple Choice $828 $878 $1,000 О O $1,516
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice Ο $1000. Ο Ο Ο $881.
An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Ο $969. Ο $1,000. Ο $931. Ο $1,621.
An investor purchases a 7-year $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Multiple Choice 0 $901. 0 $944. O S1000
please complete both required parts of the question
Exercise 5-17 (Algo) Price of a bond; interest expense (LO5-9,5-10) On June 30, 2021, Singleton Computers issued 6% stated rate bonds with a face amount of $300 million. The bonds mature on June 30, 2036 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (3.0%) on June 30 and December 31, beginning on December 31, 2021. (FV of $1. PV of...
please complete the question
Check my work Brief Exercise 5-4 (Algo) Present value; single amount (LO5-3] points John has an investment opportunity that promises to pay him $13,000 in four years. He could earn a 4% annual return investing his money elsewhere. (FV of $1. PV of St FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Skipped What is the maximum amount he would be willing to invest...
please compelte the question
Brief Exercise 5-3 (Algo) Future value; solving for unknown; single amount (L05.4) Bill O'Brien would like to take his wife, Mary, on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $25,500 inheritance from an uncle and intends to invest it for the trip. Bill estimates the trip will cost $32,130. FV of $5 PV of $1, FVA of $1. PVA of $1. EVAD of $1 and...
Exercise 5-13 (Static) Solving for unknowns; annuities (LO5-9) For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (/= interest rate, and n=number of years) (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar...
Most questions answered within 3 hours.
-
A solid, uniform disk of radius 0.250 m and mass 53.7 kg rolls
down a ramp...
asked 2 hours ago -
Given the following table of high speed internet access vs.
annual home income:
Home Income
%...
asked 2 hours ago -
A baseball batter hits a 0.145kg baseball straight up into the
air. The baseball leaves the...
asked 3 hours ago -
An FM modulator is tested using
single-tone baseband signal with frequency of 50kHz and a sprectrum...
asked 3 hours ago -
Write the ionic equations for the first stage of salts
hydrolysis.
Anion, Cation?
Na2S
NiSO4
K2SO4...
asked 5 hours ago -
suppose there is a normally distributed population with a mean of
250 and a standard deviation...
asked 5 hours ago -
Question Three
Suppose you as project manager are using the Waterfall
development methodology on a large...
asked 6 hours ago -
Which statement is not true about welfare in Canada?
A.Benefits typically vary based on one's ability...
asked 7 hours ago -
Please help me with FLOWCHART and UML diagram for class,
thank you!
#include <iostream>
#include <fstream>...
asked 8 hours ago -
3. Describe the “logic circuit” of the Lac operon. Which
proteins are bound or not to...
asked 8 hours ago -
Ayesha’s adjusted gross income is $60,000 in 2019. She donated a
piece of artwork with a...
asked 8 hours ago -
For Dijkstra’s shortest path algorithm:
a. Give the Big-O time for Dijkstra’s shortest path algorithm
and...
asked 8 hours ago