[2 points]Question:Six years ago, Bradford Community Hospital issued 20-year municipal bondswith a 7 percent annual coupon rate. The bonds were called today for a $70call premium--that is, bondholders received $1,070 for each bond. What is therealized rate of return for those investors who bought the bonds for $1,000when they were issued?Question:You purchase a bond with an invoice price of $1,490. The bond has a couponrate of 4.6 percent, and there are 3 months to the next semiannual coupondate. What is the clean price of the bond.?

Question:- Six years ago, Bradford Community Hospital issued 20-year municipal bonds with a 7…

Answered: [2 points] Question: Six years ago,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Media Bias Incorporated issued bonds 10 years ago at $1,000 per bond. These bonds had a 40-year life when issued and the annual interest payment was then 11 percent. This return was in line with the required returns by bondholders at that point in time as described below: Real rate of return 2% Inflation premium 4 Risk premium 5 Total return 11% Assume that 10 years later, due to good publicity, the risk premium is now 3 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds. The bonds have 30 years remaining until maturity. Compute the new price of the bond. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
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What is the YTM of this corporate bond - 20-year bond issued 5 years ago, interest rate of 4%, you just purchased it for $1,062.50? What is this bond's current yield?
In 1994, you purchased a, $1,000 corporate bond issued by Boeing. At the time, the interest rate for the bond was 9.50 percent. Today, comparable bonds are paying 5.25 percent. What is the approximate dollar price for which you could sell your Boeing bond?
1. XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issue to raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate. Rounded to the nearest whole number.
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QUESTION 1 UMass Boston issued bonds to pay for the construction of the residencce halls. One of their bond issues pays a coupon of $43.76 twice a year. What is the coupon rate? Answer as a percent. QUESTION 2 What is the coupon rate for the bond? Assume semi-annual payments. Answer as a percent! Coupon Rate Bond City of Somerville ? Yield 4.4% Price $990.90 t 18
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ABC Company issued a $250,000 bond at the coupon rate of 2 percent payable semi-annually. Now, the bond has a remaining life of 4 years. i. Two years from now, you bought the ABC bond when the market interest rate for a new ABC bond is 4 percent. How much did you pay for the bond? ii. You sold the bond purchased in part i. after holding it for a year, when interest rates (for bonds of similar risk as ABC's bonds) fell to 3 percent. What is the percentage gain / loss on the bond? Illustrate your answer using the bond valuation equation.
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Tom Cruise Lines Incorporated issued bonds five years ago at $1,000 per bond. These bonds had a 30-year life when issued and the annual interest payment was then 14 percent. This return was in line with the required returns by bondholders at that point as described below: Real rate of return Inflation premium Risk premium Total return 3% 6 5 14% Assume that five years later the inflation premium is only 3 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds. The bonds have 25 years remaining until maturity. Compute the new price of the bond. 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. Round your final answer to 2 decimal places. Assume interest payments are annual. New price of the bond

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