1. Tesla issued a Zero Coupon bond that now has 7 years to maturity. If its current market rate i...
1. Tesla issued a Zero Coupon bond that now has 7 years to maturity. If its current market rate is 8.6%/year, what is its market price?
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1. Tesla issued a Zero Coupon bond that now has 7 years to maturity. If its current market rate i...
. Current yield is 6.2% today on a bond that is just issued with 4 years to maturity, 6.5% coupon rate and S1,000 face...
. Current yield is 6.2% today on a bond that is just issued with 4 years to maturity, 6.5% coupon rate and S1,000 face value a) (10 points) What will be the price of this bond exactly in two years (after it distributes its second coupon) if the market rate doubles? c (15 points) How much capital gains should an investor expect to get in the subsequent year if she buys this bond at that time (in two years, after...
A company has an annual coupon bond issue that has a coupon rate of 7%, a...
A company has an annual coupon bond issue that has a coupon rate of 7%, a par value of $1,000, and a current price of $1,153.19. Determine the bond’s YTC if the bond is called back 4 years from now with a call premium of 10%. Group of answer choices 5% 10% 7% $1,100 A $1,000 par value bond has an 8% coupon rate (paid semiannually). It has 5 years remaining to maturity. If bond’s current price $1,085.30, what should...
Corn Farm issued a bond with 25 years to maturity and a semiannual coupon rate of...
Corn Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 4 percent 5 years ago. The bond currently sells for 104 percent of its face value. The company’s tax rate is 24 percent. The book value of the debt issue is $50 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 7 years left to maturity; the book value of this issue is $35 million,...
5. Eleven years from now the bond will have 1 year until maturity. Assume market interest...
5. Eleven years from now the bond will have 1 year until maturity. Assume market interest rates are at 7 percent, the same place they were when the bond was issued. Given this: k. What will be the bond's price 11 years from now? 1. What will be the current yield eleven years from now? m. What is the expected capital gains yield eleven years from now? n. How does you answers to part (1) and (m) compare with your...
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon...
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon rate of 8.60%, 5 years to maturity and a yield to maturity of 9.20% Find the equilavent years to maturity of a zero-coupon bond to one that has a coupon rate of 660% (annual coupons) 10 years to maturity, and a yield to maturity 3 of 6.00%. Find the approximate percentage change in the price of a bond due to a 10 basis point...
Assume that the price of a $1,000 zero coupon bond with 7 years to maturity is...
Assume that the price of a $1,000 zero coupon bond with 7 years to maturity is $547 when the required rate of return is 9 percent. If the required rate of return suddenly changes to 13 percent, what is the price elasticity of the bond? 7. 8. Assume a bond with a $1,000 par value and an 7 percent coupon rate, two years remaining to maturity, and a 9 percent yield to maturity. What is the duration of this bond?
A newly issued bond has a maturity of 10 years and pays a 7% coupon rate...
A newly issued bond has a maturity of 10 years and pays a 7% coupon rate (with coupon payments coming once annually). The bond sells at par value. a. What are the convexity and the duration of the bond? Use the formula for convexity in footnote 7. (Round your answers to 3 decimal places.) Convexity Duration years b. Find the actual price of the bond assuming that its yield to maturity immediately increases from 7% to 8% (with maturity still...
Suppose the semiannual 10% coupon bond was issued 20 years ago and now has 10 years to maturity. What would happen to it...
Suppose the semiannual 10% coupon bond was issued 20 years ago and now has 10 years to maturity. What would happen to its value over time if the required rate of return at 10%, or at 13%, or at 7%?
Shanken Corp. issued a bond with a maturity of 10 years and a semiannual coupon rate...
Shanken Corp. issued a bond with a maturity of 10 years and a semiannual coupon rate of 10 percent 4 years ago. The bond currently sells for 94 percent of its face value. The book value of the debt issue is $55 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 14 years left to maturity; the book value of this issue is $30 million and the bonds sell for 55...
If a coupon bond has two years to maturity, a coupon rate of 8%, a par...
If a coupon bond has two years to maturity, a coupon rate of 8%, a par value of $800, and a yield to maturity of 12%, then the coupon bond will sell for $ (Round your response to the nearest two decimal place) The price of a bond and its yield to maturity are Positively related, negitively related, or unrelated. which of the following statements is not true? A. The longer to maturity, the greater is the change in the...
. Current yield is 6.2% today on a bond that is just issued with 4 years to maturity, 6.5% coupon rate and S1,000 face value a) (10 points) What will be the price of this bond exactly in two years (after it distributes its second coupon) if the market rate doubles? c (15 points) How much capital gains should an investor expect to get in the subsequent year if she buys this bond at that time (in two years, after...
5. Eleven years from now the bond will have 1 year until maturity. Assume market interest rates are at 7 percent, the same place they were when the bond was issued. Given this: k. What will be the bond's price 11 years from now? 1. What will be the current yield eleven years from now? m. What is the expected capital gains yield eleven years from now? n. How does you answers to part (1) and (m) compare with your...
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon rate of 8.60%, 5 years to maturity and a yield to maturity of 9.20% Find the equilavent years to maturity of a zero-coupon bond to one that has a coupon rate of 660% (annual coupons) 10 years to maturity, and a yield to maturity 3 of 6.00%. Find the approximate percentage change in the price of a bond due to a 10 basis point...
Assume that the price of a $1,000 zero coupon bond with 7 years to maturity is $547 when the required rate of return is 9 percent. If the required rate of return suddenly changes to 13 percent, what is the price elasticity of the bond? 7. 8. Assume a bond with a $1,000 par value and an 7 percent coupon rate, two years remaining to maturity, and a 9 percent yield to maturity. What is the duration of this bond?
A newly issued bond has a maturity of 10 years and pays a 7% coupon rate (with coupon payments coming once annually). The bond sells at par value. a. What are the convexity and the duration of the bond? Use the formula for convexity in footnote 7. (Round your answers to 3 decimal places.) Convexity Duration years b. Find the actual price of the bond assuming that its yield to maturity immediately increases from 7% to 8% (with maturity still...
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