9. Messenger, Inc. bonds have a 4% coupon rate with semiannual coupon payments and a $1,000 par value. The bonds have 11 years until maturity, and sell for $925. What is the current yield for Messenger's bonds? A. 2.16% B. 3.45% C. 4.32% D. 5.52%

9. Messenger, Inc. bonds have a 4% coupon rate with semiannual coupon payments and a $1,000 par value. The bonds have 11 years until maturity, and sell for $925. What is the current yield for Messenger's bonds? A. 2.16% B. 3.45% C. 4.32% D. 5.52%

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

See similar textbooks

Related questions

Q: Jerome Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a…

A: Yield to call is the rate of return the bond earns till the date of call, it considers the current…

Q: he bonds issued by Stainless Tubs bear a 6 percent coupon, payable semiannually. The bonds mature in…

A: Yield to maturity is the rate of return realized on bond when bond is held till maturity and all…

Q: with a coupon that pays Disney issued a 30-year bond with a par value of $1,000, last year, $35…

A: Price of bond is the present value of the coupon payments plus present value of the par value of the…

Q: Bellamee Ltd has bonds outstanding with five years to maturity and are priced at $920.87. If the…

A: Face Value = $1,000 Coupon Rate = 7% Time Period = 5 years Price = $920.87

Q: Copper Corp. has an outstanding bond issue that is currently selling for $1,073.95. The yield to…

A: The current yield is a crucial metric for investors to assess the income potential of a bond…

Q: Company I issued R10 000 par value bonds with a coupon rate of 15% which will mature in 5 years’…

A: The question is asking us to calculate the present value of a bond. The bond has a par value of R10…

Q: Ninja Company's bonds mature in 10 years, have a par value of $1,000, and make an annual coupon…

A: Par value of the bond is $1,000. Maturity is 10 years. Annual coupon payment is $70. Required…

Q: Tidewater Corp.'s bonds have a 7% coupon rate. Interest is paid semiannually and the bonds have a…

A: We require to compute the current price i.e. present value of bond in this question. We can…

Q: Tesla's bond pays $ 70 in annual interest, with a $ 1,000 par value. The bond matures in 17 years.…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: McCoy Industries' bonds currently sell for $1,302.40 and have a $1,000 par value. They have a…

A: Current Price of Bond = pv = $1302.40face Value = fv = $1000Coupon rate = c = 6.25%Time = t = 10

Q: McConnell Corporation has bonds on the market with 15 years to maturity, a YTM of 7.0 percent, a par…

A: A Bond refers to a concept that is defined as an instrument that represents the loan being made by…

Q: Onipa Hia Mmoa Holdings bonds have an annual coupon payment of 7.25%. The bonds have a par value of…

A: Coupon rate = 7.25%Par value = 1000Bond price = 1125Maturity period = 13 years

Q: Sentry Corp. bonds have an annual coupon payment of 7.69%. The bonds have a par value of $1,000, a…

A: Annual coupon will be $1000 * 7.69% = $76.9 YTM using rate function in excel

Q: il Wells offers 5.65% coupon bonds with semi-annual payments and a yield to maturity of 6.94%. The…

A: The question is based on the concept of Security Valuation. The fair value of the bond can be…

Q: GHI Co's 15-year bonds currently sell for $1,125 and have a par value of $1,000. The coupon rate is…

A: A callable bond is a bond with contingency that can be called back by the company after a certain…

Q: Grohl Co. issued 11-year bonds a year ago at a coupon rate of 11 percent. The bonds make semiannual…

A: Given information in question Coupon rate = 11% (semi-annual…

Q: Schallheim Corporation’s outstanding bonds have a $1,000 par value, a 14 percent semiannual coupon,…

A: Compound = Semiannually = 2Face Value = fv = $1000Coupon Rate = 14 / 2 = 7%Time = t = 6 * 2 =…

Q: Stingray Corporation's 5.1% bonds have a par value of $1,000 and pay interest semi-annually. If the…

A: The price of a bond is determined by a combination of factors, including its coupon rate, the…

Q: Orca Industries' 5.75% bonds currently sell for $1,370.54. They mature in 24 years and have a par…

A: Bonds are typically more accessible to individual investors than other types of debt securities such…

Q: Meade Corporation bonds mature in 22 years and have a yield to maturity of 8.2 percent. The par…

A: Compound = Semiannually = 2Time = t = 22 * 2 = 44Yield to Maturity = r = 8.2 / 2 = 4.1%Face Value =…

Q: Bond X is issued by the company two years with 12 years to maturity. The coupon rate is 10% and…

A: We are given the following data :Years to maturity : 12 Coupon rate : 10%Yield to maturity : 12%Par…

Q: Wingler Inc.'s outstanding bonds have a $1,000 par value, and they mature in 15 years. Their nominal…

A: An important consideration in evaluating a bond's appeal to investors is its coupon rate. The bond…

Q: AA Company has a bond that makes semiannual payments with a coupon rate of 5.4 percent. The bond…

A: Yield to Maturity (YTM) is a financial term used to describe the total return anticipated on a bond…

Q: Fingen's 16-year, $1 comma 000 par value bonds pay 14 percent interest annually. The market price…

A: Face value$1,000Market price of bond$1,070Coupon rate14%Years to maturity16 years

Q: What is the bond's nominal yield to call? A. 5.27% B. 5.01% C. 6.10% D. 5.81% E. 5.54%.

A: The yield to call is the rate of return that an investor can expect if they hold a callable bond…

Q: Exotic Flower Imports has an outstanding issue of $1,000 face value bonds that mature in 8 years and…

A: Bonds are debt instruments issued by companies.The company that issues the bond pays interest or…

Q: 8 A 6% coupon rate bond makes "semi-annual" interest rate payments. Par value is $1,000. The bond…

A: Compound = Semiannually = 2Coupon rate = c = 6 / 2 = 3%Face Value = fv = $1000Time = t = 6 * 2 = 12…

Q: a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to…

A: YTM is the annual return that a bond holder would receive if the held the bond until maturity.

Q: 1.Using annual compounding, find the prices of the following bonds with $1,000 par value: a. A…

A: Current Price of bond is calculated by sum of present value of all future cash flows from the bond.…

Q: An Ordinary bond issued by Morgan Stanley matures in exactly 7 years and pays an annual coupon of…

A: Today’s quoted price for Morgan Stanley bond can be computed as follows:

Q: Radoski Corporation's bonds make an annual coupon interest payment of 7.35% every year. The bonds…

A: The objective of this question is to calculate the yield to maturity (YTM) of a bond. The YTM is the…

Q: Nungesser Corporation has issued bonds that have a 9 percent coupon rate, payable semiannually. The…

A: This question require us to compute the price of the bonds from below given details: Coupon rate =…

Q: Review the Bond Table below; all bonds have semi-annual payments. Security. Coupon Rate Face Value…

A: Coupon rate is the interest rate attached to the bond. It implies that this bond is required to pay…

Q: 14.. Fly Adventures issues bonds due in 10 years with a stated interest rate of 6% and a face value…

A: Bond valuation or issue Price, is the present value of the bond at which the bond is selling in the…

Q: Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds…

A: Yield to Maturity is the yield an investor can expect when the bond is held till maturity.

Question

9. Messenger, Inc. bonds have a 4% coupon rate with semiannual coupon payments
and a $1,000 par value. The bonds have 11 years until maturity, and sell for $925.
What is the current yield for Messenger's bonds?
A. 2.16%
B. 3.45%
C. 4.32%
D. 5.52%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Calculation of current yield

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?
Waylan Sisters Inc. issued 3-year bonds with a par value of $100,000 and a 6% annual coupon when the market rate of interest was 5%. If the bonds sold at 102.438, how much cash did Williams Sisters Inc. receive from issuing the bonds?
Bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds?
Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually and warrants attached. These bonds are currently trading for $1,000. Neubert also has outstanding $1,000 par value 15-year straight debt with a 7% coupon paid annually, also trading for $1,000. What is the implied value of the warrants attached to each bond?
Gingko Inc. issued bonds with a face value of $100,000, a rate of 7%, and a 10-yearterm for $103,000. From this information, we know that the market rate of interest was ________. A. more than 7% B. less than 7% C. equal to 7% D. equal to 1.3%
Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the market rate was 4%. Interest was paid annually. The bonds were sold at 87.5. What was the sales price of the bonds? Were they issued at a discount, a premium, or at par?
A. Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 6.7% on these bonds. What is the bond's price? a. $1,215.14 b. $1,155.86 c. $1,047.19 d. $770.58 e. $987.92 B. Which of the following statements is CORRECT? a. IPO prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the close of trading on the day the stock is offered to the public. b. It is possible that the price set in an IPO is so low that investors will want to buy more shares than the company wants to sell. In that case, the company will have to issue more shares than it wants to sell. c. The term "IPO" stands for Introductory Price Offered, and it is the price at which shares of a new company are offered to the public. d. In a "Dutch auction," investors who want to buy shares in an IPO submit bids…
Sentry Corp. bonds have in annual coupon payment of 7.25%. The bonds have a par value of $1,000, a current price of $1,125, and they will mature in 13 years. What is the yield to maturity on these bonds? a. 5.56% b. 6.45% c. 5.85% d. 6.14% e. 6.77%
Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 6.1% on these bonds. What is the bond's price? O a. $1,024.74 O b. $1,116.97 O c. $1,147.71 O d. $1,096.47 O e. $1,280.93
Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 6.1% on these bonds. What is the bond's price? a. $1,024.74 b. $1,147.71 c. $1,116.97 d. $1,096.47 e. $1,280.93 please type out all of your work
Quade, Inc. bonds have a 4% coupon rate with semiannual coupon payments and a $1,000 par value. The bonds have 11 years until maturity, and sell for $990. What is the current yield for Quade's bonds? OA. 4.32% OB. 2.02% OC. 6.95% OD. 3.45% O E. None of the above.