8. A bond with a par value of 30,000 is priced at 108.40 of par and has 10 years remaining until maturity. The bond has an 8% coupon rate, paid semi-annually. What is the amount of next coupon payment?A. 600 B. 1200 C. 2400 D. 3252 E. None of above 9. ABC common stock is expected to have extraordinary growth in earnings and dividends of 25% per year for year 2 and 3, after which the growth rate will settle into a constant 5%. If the required return by investors is 13% and next year’s dividend is 4. What should be the approximate current share price?A. 60.58 B. 65.10 C. 68.64 D. 73.56 E. None of above 10. An investor receives a 15% total return by purchasing a stock for 40 and selling it after one year with a 5% capital gain. What is the selling price after one year?A. 40 B. 42 C. 44 D. 46 E. None of above 11. A stock has the following information. What is the stock price?- Required rate of return: 14%- ROE: 15%- Plowed back ratio: 40%- Expected dividend: 1A. 12.5 B. 13.5 C. 14.5 D. 15.5 E. None of above

As per Bartleby honor code guidelines, when multiple questions are asked, the exper is required to only solve the first question in queue. So, the following solution is for Question 8 only.Solution:Coupon payments are the periodic payments made to the bond holders.It is the percentage of the par value of bond.In the given case, par value of bond = 30,000Coupon rate = 8% payable semi-annually.So, coupon payment = (½ x 8)% of 30,000So, coupon payment = 4% of 30,000So, coupon payment = 1,200Hence, option B) is correct i.e. 1,200Option B) is correct i.e. 1,200

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8. A bond with a par value of 30,000 is priced at 108.40 of par and has 10 years remaining until maturity. The bond has an 8% coupon rate, paid semi-annually. What is the amount of next coupon payment? A. 600 B. 1200 C. 2400 D. 3252 E. None of above

8. A bond with a par value of 30,000 is priced at 108.40 of par and has 10 years remaining until maturity. The bond has an 8% coupon rate, paid semi-annually. What is the amount of next coupon payment? A. 600 B. 1200 C. 2400 D. 3252 E. None of above

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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7. Suppose a bond is purchased with a settlement date of October 15 and the next coupon payment is on December 1. The par amount purchased on the bond is $100,000, and its annual coupon rate is 4% paid semiannually. (1) What is the accrued interest using the 30/360-day count convention? (2 points) (2) What is the accrued interest using the actual/actual day count convention? (2 points)
A bond has $ 94000 face value and the coupon rate of the bond is 3.4 % (APR). The YTM of the bond is 6.8 %. What is the fair price of the bond assuming that the maturity of the bond is 8 years and the bond pays coupon in every 6 months? (Give the answer in round numbers without presenting a $sign.) Answer: Time left 0:06:54 Next page
4. A 5-year bond (denote this as Bond A) with semiannual coupons has a face value of $1,000 and a coupon rate of 6%. The bond is redeemable at 125% of the face value at maturity, and is currently selling for $1,015. Assume the next coupon is due six months from now. (a) Using linear interpolation with end points being 9% and 10%, approximate the bond's effective annual yield. (b) Another 5-year bond (denote this as Bond B) pays annual coupons and has the same face value, coupon rate, redemption value and yield as Bond A. Which bond has a larger duration? Explain your answer.
A $1,000 bond with a coupon rate of 5.7% paid semiannually has five years to maturity and a yield to maturity of 7%. If interest rates rise and the yield to maturity increases to 7.3%, what will happen to the price of the bond? A. fall by $14.37 B. rise by $11.97 C. fall by $11.97 D. The price of the bond will not change.
Bond A pays annual interest, has 6 percent annual coupons, $1,000 face value, and currently has 6 percent yields to maturity. The bond has 12 years to maturity. If the market rate of interest rises unexpectedly to 7 percent, what is the percentage change in the price of Bond A? A) -3.39% B) -5.73% C) -6.08% D) -7.94%
(Yield to maturity) A bond's market price is $825. It has a $1,000 par value, will mature in 6 years, and has a coupon interest rate of 11 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 12 years? What if it matures in 3 years? a. The bond's yield to maturity if it matures in 6 years is b. The bond's yield to maturity if it matures in 12 years is c. The bond's yield to maturity if it matures in 3 years is %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.)
K Suppose a five-year, $1,000 bond with annual coupons has a price of $895.56 and a yield to maturity of 6.4%. What is the bond's coupon rate? *** The bond's coupon rate is %. (Round to three decimal places.)
None
Only typed answer
9. A bond has a time-to-maturity of 8 years, a coupon rate of 5%, is currently selling for $1021.35. What is the bond's yield if it pays interest annually? A. 4.6740%. B. 5.6874%. C. 3.2654%. D, 4.0258%.
(Related to Checkpoint 9.4) (Bond valuation) A bond that matures in 8 years has a $1,000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? Question content area bottom Part 1 a. The value of this bond if it paid interest annually would be $enter your response here. (Round to the nearest cent.) Part 2 b. The value of this bond if it paid interest semiannually would be $enter your response here. (Round to the nearest cent.)
What is the last payment amount of a bond with 1 payment per years, Coupon Rate 8.50% and principal and $514,000 principal and matures in 10 years? Answer with two decimal digits accuracy. Example: 631062.50

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