ZuoTi.Pro
Question

5. A firms bonds have a maturity of 8 years with a $1,000 par value,, have an 11% coupon rate, are callable in 4 years at $1

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

1.
N=8*4
PMT=11%*1000/4
FV=1000
PV=-1283.09
CPT I/Y=1.611%

Hence, yield to maturity=1.611%*4=6.444%

2.
N=4*4
PMT=11%*1000/4
FV=1154
PV=-1283.09
CPT I/Y=1.586%

Hence, yield to call=1.586%*4=6.344%

0 0
Add a comment
Know the answer?
Add Answer to:
5. A firm's bonds have a maturity of 8 years with a $1,000 par value,, have...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 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...

  • A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...

    A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1,152.08, and currently, sell at a price of $1,279.03. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM:   % YTC:   % What return should investors expect to earn on these bonds? Investors would not expect the bonds to...

  • A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...

    A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 4 years at $1,039.51, and currently sell at a price of $1,078.99. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places YTM: YTC: What return should investors expect to earn on these bonds? I. Investors would not expect the bonds to be...

  • A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...

    A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1,143.35, and currently sell at a price of $1,263.69. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM:   % YTC:   % What return should investors expect to earn on these bonds? Investors would expect the bonds to be called and...

  • A firm's bonds have a maturity of 14 years with a $1,000 face value, have an...

    A firm's bonds have a maturity of 14 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 7 years at $1,238.44, and currently sell at a price of $1,411.89. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM:   % YTC:   % What return should investors expect to earn on these bonds? Investors would not expect the bonds to be called...

  • A firm's bonds have a maturity of 14 years with a $1,000 face value, have an...

    A firm's bonds have a maturity of 14 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 7 years at $1,225.29, and currently sell at a price of $1,385.12. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: What return should investors expect to earn on these bonds? I. Investors would not expect the bonds to...

  • A firm's bonds have a maturity of 14 years with a $1,000 face value, have an...

    A firm's bonds have a maturity of 14 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 7 years at $1,065.00, and currently sell at a price of $1,122.94. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: 0% YTC: % What return should investors expect to earn on these bonds? I. Investors would not expect the bonds...

  • A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 yea...

    A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,049.30, and currently sell at a price of $1,096.70. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM:   % YTC:   % What return should investors expect to earn on these bonds? Investors would expect the bonds to be called and...

  • Yield To Maturity. A firm’s bonds have a maturity of 10 years with a $1,000 face...

    Yield To Maturity. A firm’s bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,050, and currently sell at a price of $1,100. What are their nominal yield to maturity and their nominal yield to call? Show detailed calculations

  • 7.5 A firm's bonds have a maturity of 12 years with a $1,000 face value, have...

    7.5 A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 6 years at $1,202.84, and currently sell at a price of $1,356.18. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM:   % YTC:   % What return should investors expect to earn on these bonds? Investors would expect the bonds to be called...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT