Vulcan, Inc., has 7.8 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual paym...

Question

Question

Vulcan, Inc., has 7.8 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual payments a

Answer 1

Answer #1

Annual coupon=1000*7.8%=78

Hence current price=Annual coupon*Present value of annuity factor(9.8%,7)+1000*Present value of discounting factor(9.8%,7)

=78*4.90064305+1000*0.519736981

=$901.99(Approx).

NOTE:

1.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=78[1-(1.098)^-7]/0.098

=78*4.90064305

2.Present value of discounting factor=1000/1.098^7

=1000*0.519736981

Answer 2

Similar Homework Help Questions

Vulcan, Inc., has 7.7 percent coupon bonds on the market that have 10 years left to...

Vulcan, Inc., has 7.7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.7 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price
Vulcan, Inc., has 7.1 percent coupon bonds on the market that have 9 years left to...

Vulcan, Inc., has 7.1 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.1 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price
Vulcan inc.

Vulcan, Inc., has 7.3 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.3 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price

Staind, Inc, has 7 percent coupon bonds on the market that have 8 years left to maturity.

Staind, Inc, has 7 percent coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price? $794.16 $1,03000 $754.45 $1,242.85 $833.86
The Petit Chef Co. has 11 percent coupon bonds on the market with nine years left...

The Petit Chef Co. has 11 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,139.59, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to...

Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price?

Bourdon Software has 8.6 percent coupon bonds on the market with 20 years to maturity. The...

Bourdon Software has 8.6 percent coupon bonds on the market with 20 years to maturity. The bonds make semiannual payments and currently sell for 107.1 percent of par. What is the current yield on the bonds? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield What is the YTM? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM What...
Jeffries, Inc. has 6 percent coupon bonds on the market that have 11 years left to...

Jeffries, Inc. has 6 percent coupon bonds on the market that have 11 years left to maturity. Th bonds make annual payments. If the YTM on these bonds is 7.4 percent, what is the current bond price?
Workman Software has 10 percent coupon bonds on the market with 19 years to maturity. The...

Workman Software has 10 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 107.8 percent of par. a. What is the current yield on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)...

Henley Corporation has bonds on the market with 10.5 years to maturity, a YTM of 5.7...

Henley Corporation has bonds on the market with 10.5 years to maturity, a YTM of 5.7 percent, a par value of $1,000, and a current price of $945. The bonds make semiannual payments. What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate % You purchase a bond with an invoice price of $1,043. The bond has a coupon rate...