1. Joe's Swim Company has $1,000 par value bonds outstanding at 12% interest. The bonds will mature in 50 years. Compute the current price of the bonds if the percent yield to maturity is 14%. 2. What percent of the total bond value does the repayment of principal represent?

1. Joe's Swim Company has $1,000 par value bonds outstanding at 12% interest. The bonds will mature in 50 years. Compute the current price of the bonds if the percent yield to maturity is 14%. 2. What percent of the total bond value does the repayment of principal represent?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

1. Joe's Swim Company has $1,000 par value bonds outstanding at 12% interest. The bonds will mature in 50 years. Compute the current price of the bonds if the percent yield to maturity is 14%.

2. What percent of the total bond value does the repayment of principal represent?

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Similar questions

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Assume that Beach Inc. has an issue of 20-year $1,000 par value bonds that pay 7% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would these bonds sell for today?
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(Related to Checkpoint 9.2) (Yield to maturity) Abner Corporation's bonds mature in 17 years and pay 8 percent interest annually. If you purchase the bonds for $825, what is your yield to maturity? Question content area bottom Part 1 Your yield to maturity on the Abner bonds is enter your response here%. (Round to two decimal places.)
Barry's Steroids Company has $1,000 par value bonds outstanding at 16 percent interest. The bonds will mature in 40 years If the percent yield to maturity is 12 percent, what percent of the total bond value does the repayment of principal represent? Assume interest payments are annual Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Principal as a percentage of bond price
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(Related to Checkpoint 9.2) (Yield to maturity) Abner Corporation's bonds mature in 18 years and pay 13 percent interest annually. If you purchase the bonds for $925, what is your yield to maturity? Your yield to maturity on the Abner bonds is %. (Round to two decimal places.) C
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