Question

West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?

DTO, Inc., has sales of $41 million, total assets of $27 million, and total debt of $8 million.

a.	If the profit margin is 7 percent, what is the net income?

b.	What is the ROA?

c.	What is the ROE?

	Returns
Year	X			Y
1		12	%		25	%
2		28			34
3		9			13
4	–	7		–	27
5		10			14

  

Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations. Enter your average return and standard deviation as a percent rounded to 2 decimal places, e.g., 32.16, and round the variance to 5 decimal places, e.g., .16161.)

  

Answer 1

K = Nx2

Bond Price =∑ [(Semi Annual Coupon)/(1 + YTM/2)^k]     +   Par value/(1 + YTM/2)^Nx2

k=1

K =23x2

1050 =∑ [(5.3*1000/200)/(1 + YTM/200)^k]     +   1000/(1 + YTM/200)^23x2

k=1

YTM% = 4.93

A

Profit margin% = Net income/sales

0.07 = Net income/41

Net income = 2.87

B

ROA = Net income/total Asset

ROA% = 2.87/27

ROA% = 10.63

C

Equity = assets-liabilites = 27-9 = 19

ROE = Net income/total equity

ROE% = 2.87/19

ROE% = 15.11

Please ask remaining parts separately, questions are unrelated. I have done one bonus