Homework Answers
The answer is Option B.
A bond traded at 1021/2 means that the bond traded at 102.50% of its par value.
Bond prices are stated as percentage of par value hence 1021/2 means that bond price is 102.5% of apr value.
e carrying value of bonds at maturity always equals. Multiple Choice O the amount in excess...
e carrying value of bonds at maturity always equals. Multiple Choice O the amount in excess of par value. O the amount of cash originally received in exchange for the bonds. O the amount of discount or premium O the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. O the par value of the bond. < Prev 1 of 2 Next > Multiple Choice o The contract rate is above...
A firm has a corporate bond traded in the secondary market. The maturity of this bond...
A firm has a corporate bond traded in the secondary market. The maturity of this bond is 5 years and annual coupon interest rate is 12.5%. The bond pays annual coupons and par value is 100$. The market price of this bond is 94.5$. The expected dividend for the next year is 0.75$ per share and the market price of one share is 12$. The corporate tax rate is 20%, the beta of the firm is 1.1, the risk free...
When a bond sells at a premium Multiple Choice The contract rate is above the market...
When a bond sells at a premium Multiple Choice The contract rate is above the market rate The contract rate is equal to the market rate The contract rate is below the market rate It means that the bond is a zero coupon bond. The bond pays no interest.
bond X and bond Y. Bond X has a face value of $1,000 and 10 years...
bond X and bond Y. Bond X has a face value of $1,000 and 10 years to maturity and has just been issued at par. It bears the current market interest rate of 7% (i.e. this is the yield to maturity for this bond). Bond Y was issued 5 years ago when interest rates were much higher. Bond Y has face value of $1,000 and pays a 13% coupon rate. When issued, this bond had a 15-year, so today its...
16) Portia Grant is an employee who is paid monthly, For the month of January of...
16) Portia Grant is an employee who is paid monthly, For the month of January of the current year, she carned a total of 8988. The FICA tax for social security is 6.2% of the first $127,200 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45 % of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4 % are applied to the first $7000 of an employee's pay....
On January 1, 2017, Moritz Company issued a five-year, $300,000, 6% bond that pays interest each...
On January 1, 2017, Moritz Company issued a five-year, $300,000, 6% bond that pays interest each January 1 and July 1. The market rate at the time of issuance was 7%. Assume that, on July 1, 2020, Moritz retired all of the bonds at 99. What gain or loss, if any, will Moritz recognize on the retirement of the bonds? (Round to the nearest dollar and choose the answer closest to your calculations). $1,202 loss $1,202 gain $16,181 gain None...
Consider two bonds: bond XY and bond ZW . Bond XY has a face value of $1,000 and 10 years to maturity and has just been...
Consider two bonds: bond XY and bond ZW . Bond XY has a face value of $1,000 and 10 years to maturity and has just been issued at par. It bears the current market interest rate of 7% (i.e. this is the yield to maturity for this bond). Bond ZW was issued 5 years ago when interest rates were much higher. Bond ZW has face value of $1,000 and pays a 13% coupon rate. When issued, this bond had a...
please show how to compute with a financial calculator. thank you! Bond Valuation Exercises: OM Question...
please show how to compute with a financial calculator. thank
you!
Bond Valuation Exercises: OM Question 1. GTF Corporation has 5 percent coupon bonds on the market with a par of $1,000 and 10 years left to maturity. The bonds make annual interest payments. If the market interest rate on these bonds is 7 percent, what is the current bond price? Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8...
Bond value and changing required returns Midland Utilities has a bond issue outstanding that will mature to its $1....
Bond value and changing required returns Midland Utilities has a bond issue outstanding that will mature to its $1.000 par value in 13 years. The bond has a coupon interest rate of 13% and pays interest annually a. Find the value of the bond if the required retumis (1) 13%. (2) 17%, and (3) 10% b. Use your finding in part a and the graph here to discuss the relationship between the coupon interest rate on a bond and the...
Bond value and changing required returns Midland Utlities has a bond issue outstanding that will mature...
Bond value and changing required returns Midland Utlities has a bond issue outstanding that will mature to its $1,000 par value in 15 years. The bond has a coupon interest rate of 14% and pays interest annually a. Find the value of the bond if the required return is (1) 14%, (2) 1896, and (3) 1196. b. Use your finding in part a and the graph here, , to discuss the relationship between the coupon interest rate on a bond...
e carrying value of bonds at maturity always equals. Multiple Choice O the amount in excess of par value. O the amount of cash originally received in exchange for the bonds. O the amount of discount or premium O the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. O the par value of the bond. < Prev 1 of 2 Next > Multiple Choice o The contract rate is above...
When a bond sells at a premium Multiple Choice The contract rate is above the market rate The contract rate is equal to the market rate The contract rate is below the market rate It means that the bond is a zero coupon bond. The bond pays no interest.
16) Portia Grant is an employee who is paid monthly, For the month of January of the current year, she carned a total of 8988. The FICA tax for social security is 6.2% of the first $127,200 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45 % of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4 % are applied to the first $7000 of an employee's pay....
please show how to compute with a financial calculator. thank
you!
Bond Valuation Exercises: OM Question 1. GTF Corporation has 5 percent coupon bonds on the market with a par of $1,000 and 10 years left to maturity. The bonds make annual interest payments. If the market interest rate on these bonds is 7 percent, what is the current bond price? Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8...
Bond value and changing required returns Midland Utilities has a bond issue outstanding that will mature to its $1.000 par value in 13 years. The bond has a coupon interest rate of 13% and pays interest annually a. Find the value of the bond if the required retumis (1) 13%. (2) 17%, and (3) 10% b. Use your finding in part a and the graph here to discuss the relationship between the coupon interest rate on a bond and the...
Bond value and changing required returns Midland Utlities has a bond issue outstanding that will mature to its $1,000 par value in 15 years. The bond has a coupon interest rate of 14% and pays interest annually a. Find the value of the bond if the required return is (1) 14%, (2) 1896, and (3) 1196. b. Use your finding in part a and the graph here, , to discuss the relationship between the coupon interest rate on a bond...
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