a) ABC Ltd issues two different bonds, a 5-year semi-annual coupon bond and a 10-year zero coupon bond with the same yield to maturity. Explain which bond is subject to more interest rate risk.
a) ABC Ltd issues two different bonds, a 5-year semi-annual coupon bond and a 10-year zero...
Bond A has a 10-year maturity, a 4,5% semi-annual coupon and a yield of 8%. Bond B has a 10 year maturity, a 4.5% semi-annual coupon and a yield of 6%. What must be true about the two bonds? A. Bond A must have greater liquidity risk B. Bond B has greater default risk C. Bond Bhas greater interest-rate risk O D. Bond A must be more valuable
Bond A has a 12-year maturity, a 5% semi-annual coupon, and a yield of 43%. Bond B has a 12-year maturity a 3% coupon, and a yield of 4,3%. What must be true about the two bonds? A. Bond B has greater interest-rate risk OB. Bond A must be speculative grade since it has a higher coupon and the same yield O G. Bond B must be speculative grade since it has a lower coupon and the same yield O...
ABC issued 12-year bonds at a coupon rate of 8% with semi-annual payments. If the bond currently sells for $1050 of par value, what is the YTM? ABC issued 12-year bonds 2 years ago at a coupon rate of 8% with semi-annual payments. If the bond currently sells for 105% of par value, what is the YTM? A bond has a quoted price of $1,080.42. It has a face value of $1000, a semi-annual coupon of $30, and a maturity...
ABC Ltd is planning to issue 16-year semi-annual coupon bonds with a face value of $1,000 and a coupon rate of 6.5%. The nominal yield to maturity of potential investors is estimated to be 7.6% per annum. Calculate the required number (expressed as an integer) of semi-annual coupon bonds to be issued if the firm aims to raise $15 million. (3 marks)
macy's is planning a store expansion by issuing 10-year zero coupon bond that makes semi-annual coupon payments at a rate of 5.875% with a face value of $1,000. Assuming semi-annual compounding, what will be the price of these bonds, if the appropriate yield to maturity (discount rate) is 14%? PV= ? i/y= ? n=? PMT=? FV=?
Consider the following two bonds. One bond with a coupon rate of 4%, semi-annual coupons, and 10 years until maturity. The second bond has 5 years until maturity but is otherwise the same. What is the most you should pay for each asset if current yields are 6%? Do the bonds sell at a premium or a discount? Suppose current yields increase to 7%, what are the new bond prices? Which bond is more sensitive to yield changes? Why?
Calculate the price of 8.0% semi-annual bond. The bond was originally issued with a 10-year term to maturity and exactly five years remain until maturity. The rates on new 10-year semi-annual bonds of comparable risk are 7.0% and on new five-year semi-annual bonds of comparable risk are 6.0%. Suppose you had an 8%, $10,000 semi-annual bond with three years remaining to maturity. The yield on new three-year bonds of comparable quality is 6%. Calculate what your bond is worth in...
A Japan-based company, Sumo Gyms, Inc., issues a 35-year,
semi-annual coupon bond, with a ¥300 million par value. The coupon
rate is given as 6.70%, and the yield to maturity is 7.90. a. What
is the value of the semi-annual coupon on the bond? (Enter your
answer in millions and round to two decimal places.) b. What is the
price of the bond? (Enter your answer in millions and round to two
decimal places.)
A Japan-based company, Sumo Gyms, Inc.,...
MNO Co. issues zero coupon bonds on the market at a price of $334 per bond. Each bond has a face value of $1,000 payable at maturity in 17 years. The bonds are callable in 10 years at $683 . What is the yield to call for these bonds (in percent)? Answer to two decimals. Assume 1,000 par value and semi annual compounding
JKL Co. issues zero coupon bonds on the market at a price of $348 per bond. Each bond has a face value of $1,000 payable at maturity in 14 years. What is the yield to maturity for these bonds (in percent)? Answer to two decimals. Assume 1,000 par value and semi annual compounding