A 4% Home Depot bond with a face value of $1,000, semiannual coupon payments, and 25 years to maturity is callable in 5 years with a call premium equal to one years coupon payment. If the current market price. of the bond is $944.46, what is the bonds yield-to-call (YTC)? (State your answer as a percent rounded to the nearest one-hundredth of one percent.)

A 4% Home Depot bond with a face value of $1,000, semiannual coupon payments, and 25 years to maturity is callable in 5 years with a call premium equal to one years coupon payment. If the current market price. of the bond is $944.46, what is the bonds yield-to-call (YTC)? (State your answer as a percent rounded to the nearest one-hundredth of one percent.)

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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A 7-year, 11.00% semiannual coupon bond with a par value of $1000 may be called in 5 years at a call price of $1,175.00. The bond sells for $1,040.50. (Assume that the bond has just been issued.). What is it’s yield to maturity? Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.
A 4-year bond, with a face value of $1000, and a coupon rate of 5% (coupon is paid semi-annually), has current yield of 4.76%. Is this bond sold at a discount, or at a premium? Determine the yield to maturity of this bond.
You are given the following information aboutr a 20 year bond with face amount 4000. The bond has an anual coupon rate of 8% paid semiannually. the purchase price results is an annual nominal yield rate to the investor of 5.6% convertible semiannually. the amount for amortization of premium in the sixth coupon payment is 32. Calculate the redemption value of the bond.
A 7-year, 11.00% semiannual coupon bond with a par value of $1000 may be called in 5 years at a call price of $1,201.00. The bond sells for $985.50. (Assume that the bond has just been issued.). What is it’s yield to maturity?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. 10.51% 8.59% 11.53% 11.31% 9.27%
A 10-year bond has a coupon rate of 6.4% and pays coupons semi-annually. If the required return is 6.69%, how much should you be willing to pay for the bond today? Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate. NOTE: All bonds have a par value of $1000 that is paid at maturity. Answer:
A 6.05 percent coupon bond with 18 years left to maturity can be called in six years. The call premium is one year of coupon payments. It is offered for sale at $1,085.50. What is the yield to call of the bond? (Assume interest payments are semiannual.) (Round your answer to 2 decimal places.)
A $1,000, 9.50% semiannual bond is purchasedfor $1,010. If the bond is sold after three years andsix interest payments, what should the selling pricebe to yield a 10% return on the investment?
A 7.0 percent coupon bond with 25 years left to maturity can be called in four years. The call premium is one year of coupon payments. It is offered for sale at $1,066. What is the yield to call of the bond? (Assume that interest payments are paid annually and par value is $1,000.)
A three-year, 1000 dollars, 6 percent bond with semiannual coupons has redemption amount 1,040 dollars. Make amortization tables for this bond if it is bought to yield a nominal rate of 4 percent convertible semiannually.

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