Question

HW 10 Bond Analysis and Valuation Corporate Bonds-They Are More Complex Than You Think Jill Dougherty was hired as an investment analyst by A.M. Smith Inc. for the Cincinnati, Ohio office based on her sound academic credentials, which included an MBA from a top ranking university and a CFA designation. At the time of her recruitment she was told that one of her responsibilities would be to conduct educational seminars for current and prospective clients. A.M. Smith Inc., a prestigious investment services firm, with branches in 30 major metropolitan areas, had achieved most of its success due to its excellent client relations and focus on client support. The firm ranked among the very best in terms of the number of successful equity underwriting deals undertaken. Recently, a large utility company had hired it as the leading investment banker for a major corporate bond issue. Since most of its retail customers were more familiar with stock investments, John Sullivan, the branch manager at the Cincinnati office,

Answer 1

Annual Coupon Payment of a Bond = Face Value * Coupon Rate

Issuer	Face Value	Coupon Rate	Coupon Payment
ABC Energy	$        1,000	5%	$                                               50
ABC Energy	$        1,000	0%	This is Zero Coupon Bond
TransPower	$        1,000	10%	$                                            100
Telco Utilities	$        1,000	11%	$                                            110