Expected Ret is the Rate at which PV of CFs are equal to Bond Price.
Year | CF | PVf @9% | Disc CF | PVF @10% | Disc CF |
0 | $ -1,200.00 | 1.0000 | $ -1,200.00 | 1.0000 | $ -1,200.00 |
1 | $ 120.00 | 0.9174 | $ 110.09 | 0.9091 | $ 109.09 |
2 | $ 120.00 | 0.8417 | $ 101.00 | 0.8264 | $ 99.17 |
3 | $ 120.00 | 0.7722 | $ 92.66 | 0.7513 | $ 90.16 |
4 | $ 120.00 | 0.7084 | $ 85.01 | 0.6830 | $ 81.96 |
5 | $ 120.00 | 0.6499 | $ 77.99 | 0.6209 | $ 74.51 |
6 | $ 120.00 | 0.5963 | $ 71.55 | 0.5645 | $ 67.74 |
7 | $ 120.00 | 0.5470 | $ 65.64 | 0.5132 | $ 61.58 |
8 | $ 120.00 | 0.5019 | $ 60.22 | 0.4665 | $ 55.98 |
9 | $ 120.00 | 0.4604 | $ 55.25 | 0.4241 | $ 50.89 |
10 | $ 120.00 | 0.4224 | $ 50.69 | 0.3855 | $ 46.27 |
11 | $ 120.00 | 0.3875 | $ 46.50 | 0.3505 | $ 42.06 |
12 | $ 120.00 | 0.3555 | $ 42.66 | 0.3186 | $ 38.24 |
12 | $ 1,000.00 | 0.3555 | $ 355.53 | 0.3186 | $ 318.63 |
NPV | $ 14.82 | $ -63.73 |
Expected Ret = Rate at which least +ve NPV + [ NPV at that rate / change in NPV due to1% inc in disc Rate ] * 1%
= 9% + [ 14.82 / 78.55 ] * 1%
= 9% + 0.19%
=9.19%
Problem 7-18 (similar to) Question Help (Bondholders' expected rate of return) You own a bond that has a par value...
(Bondholders' expected rate of return) You own a bond that has a par value of $1000 and matures in 18 years. It pays an annual coupon rate of 8 percent. The bond currently sells for $725. What is the bond's expected rate of return? The bond's expected rate of return is nothing
Ch. 7 Round to two decimal places. Answer in PERCENTAGE FORM. (Bondholders' expected rate of return) You own a bond that has a par value of $1,000 and matures in 16 years. It pays an annual coupon rate of 9 percent. The bond currently sells for $1,125. What is the bond's expected rate of return? The bond's expected rate of return is %. (Round to two decimal places)
Problem 7-27 (similar to) Question Help (Bondholders' expected rate of return) You purchased a bond for $900. The bond has a coupon rate of 12 percent, which is paid semiannually. It matures in 16 years and has a par value of $1,000. What is your expected rate of return? Ved at du og Doddi
(Bondholders' expected rate of return) The market price is $1,050 for a 16-year bond ($1,000 par value) that pays 9 percent interest (4.5 percent semiannually. What is the bond's expected rate of return? The bond's expected annual rate of return is % (Round to two decimal places.)
Bondholders' expected rate of return) The market price is $1000 for a 16-year bond ($1000 par value) that pays 8 percent interest (4 percent semiannually). What is the bond's expected rate of return? The bond's expected annual rate of return is
P9-7 (similar to) Question Help (Related to Checkpoint 9.2) (Yield to maturity) The market price is $1,175 for a 9-year bond ($1.000 par value) that pays 9 percent annual interest, but makes interest payments on a semiannual basis (4.5 percent semiannually). What is the bond's yield to maturity? The bond's yield to maturity is %. (Round to two decimal places) P9-8 (similar to) 15 Question Help Help (Yield to maturity) A bond's market price is $750. It has a $1,000...
QUESTION 7 You own two $1,000 par bonds, one in this problem and one in the next. I want to illustrate something else. Both of these bonds are zero coupon bonds, which simply means they pay no coupon. The first bond matures in 3 years, and yields 8%. If the required yield drops to 6% (instantaneously, so the maturity does not change), what is the percentage price change? Answer in percent to three decimal places. Do not enter the percent...
1) Bond with a $1.000 par value has an 8 percent annual coupon rate. It will mature in 4 years, and annual coupon payments are made at the end of each year. Present annual yields on similar bonds are 6 percent. What should be the current price? - a. S1.069.31 b. S1.000.00 c. $9712 d. $927.66 e. none of the above 2) A bond with a ten percent coupon rate bond pays interest semi-annually. Par value is $1.000. The bond...
A $1,000 par value bond with a 9.00% coupon rate (semianual interest) matures in 8 years and currently sells for $988.09. What is the bond's yield to maturity and bond equivalent yield? The bond's yield to maturity is % (Round to two decimal places.)
12. A $1,000 par value bond sells for $1,216. It matures in 20 years, has a 19 percent coupon, pays interest semiannually, and can be called in 5 years at a price of $1124. What is the bond's Yield -to-Call?