The table is reproduced below, filling up the missing values:
Appropriate values are ascertained as follows:
Price of FGH using PV Function of Excel as follows:
Yield of QRP using RATE function of Excel as follows: (Multiplied by 2 since it is semiannual)
For Coupon rate of VWX, Coupon amount was first ascertained usinf the PMT function of Excel as follows:
Coupon rate was then arrived at using the formula (PMT/Face Value)*No. of times a year =(2.50/100)*2=5%
Price of MNO is found using PV function as follows:
Yield of JKL using RATE function (Multiplied by 2, as it is semi annual)
Following is information about bonds that are identical except for their terms to maturity: Price 92.401...
Periods 10 Bond ABC FGH VWX Coupon Maturity 4.600% 12/31/2024 8.490% 12/31/2025 5.000% 12/31/2027 Price 92.401 94.029 97.429 Yield 6.40% 6.00% 5.40% 12 16 Assume that today is December 31, 2019. Each bond pays interest semiannually, on June 30 and December 31 every year. Construct an immunized portfolio for an investor with an investment horizon equal to six (6) years. Compute the expected yield of the portfolio you construct. Compute the total amount an investor must invest in each bond...
Maturity Periods Bond Price Yield Coupon 12/31/2024 4.600% 6.40% АВС 10 92.401 12/31/2025 12 6.00% 8.490% FGH 94.029 12/31/2027 5.40% VWX 5.000% 97.429 16 Assume that today is December 31, 2019. Each bond pays interest semiannually, on June 30 and December 31 every year Construct an immunized portfolio for an investor with an investment horizon equal to six (6) years. Compute the expected yield of the portfolio you construct. Compute the total amount an investor must invest in each bond...
[The following information applies to the questions displayed below.] Duval Co. issues four-year bonds with a $106,000 par value on January 1, 2019, at a price of $100,944. The annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. Prepare journal entries to record the first two interest payments. (Round your answers to the nearest dollar amount.) 2) Record the interest payment and discount amortization on December 31, 2019. Options for the General Journal...
Required Information Exercise 9-18A Calculate the issue price of bonds (LO9-7) The following information applies to the questions displayed below] On January 1, 2021, Frontier World issues $39.7 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride....
[The following information applies to the questions displayed below.] Legacy issues $600,000 of 7.0%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $541,807 when the market rate is 10%. 1. Prepare the January 1 journal entry to record the bonds' issuance. Options for the General Journal Accounts payable Accounts receivable Accumulated depreciation Bond interest expense Bond interest payable Bonds payable Cash Common stock Contributed capital in excess of...
Additional Assignment :Use the following information to answer questions 9-11. On January 1, 2018 Ball Corp issued $20,000,000 of 3% bonds due in 20 years with interest payable semiannually on June 30 and December 31 each year. The market rate is 4%. The bonds issue at $17,264,444. 9) Which of the following is true about the issue price and the face price? A) The difference in the bond issue price and the bond face value represents additional interest revenue for...