Answered: A bond with a par value of P5,000 and…

A bond with a par value of P5,000 and with a bond rate of 9% payable annually is sold now for P5,100. If the yield is to be 12%, how much should the redemption price be at the end of 10 years?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: what will the price be 6 years from now?

A: Bond price means discounting the future cashflows of the bond by using discounting factor.

Q: 2. The income distribution for the year ended Dec. 31, a

A: 2. Journal entry for income distribution Date Particular Debit Amount Credit Amount 31dec…

Q: The amount of the prospective investor pay for a bond if he desires an 13% return on his investment…

A: Redemption amount (R) = P 40000 Annual interest (A) = P 1200 n = 20 years r = 13%

Q: what is the bond's yield to maturity?

A: Call price = Par value + call premium = $1000 + $1000*10% = $1100

Q: A $1,000 face (par) value bond is paying an annual $50 coupon and maturing in 3 years. of the…

A: A bond price is the sum of money an investor is ready to spend on a bond in the secondary market…

Q: A bond with a par value of Php 8,000 and with a bond rate of 10% payable annually is to be redeemed…

A: Year Present Value Factor @ 12% 1 0.893 2 0.797 3 0.712 4 0.636 5 0.567 6 0.507 7…

Q: Consider a 2-year bond selling at par value paying a 10% coupon once a year. The yield to maturity…

A: The compounded rate of return will depend upon the reinvestment rate. If the reinvestment rate is…

Q: You purchase a 20 year semi annually 9% coupon bond with an 11% YTM today. In one year you sell. If…

A: In a sale purchase transaction of a bond, we have to find the 1 year holding period return (HPR).

Q: ou buy a bond today. The bond has a face value of $1000, will mature in 10 years, and pays coupon on…

A: Given: Face Value of bond “FV” = $1000 Annual coupon rate = 8% Annual Coupon “PMT” = 8%*1000 =$80…

Q: D Right Side Inc. will offer a coupon of 4% per annum on its much awaited 20-year bonds. By the…

A: Here, To Find: Yield to maturity (YTM) =?

Q: A bond with a face value of P1,000 matures in 12 years and has a 10% percent annual coupon. it can…

A: Yield to call will be the rate at which the PV of all annual coupon till call and redemption price…

Q: The 6-months zero rate is 8.60% per annum with continuous compounding. The price of a one-year bond…

A: A bond is a debt instrument that is used to raise capital from investors. The investors loan the…

Q: One-year T-bill rates are 2% currently. If interest rates are expected to go up after 3 years by 2%…

A: T-Bills are debt security which is issued for shore time period, issued by US government. It is…

Q: A newly issued bond pays its coupons once annually. Its coupon rate is 5.4%, its maturity is 20…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: You will be paying $8,600 a year In tultion expenses at the end of the next two years. Bonds…

A: The objective of the question is to calculate the present value and duration of the tuition…

Q: uppose you considering buying a 10-year bond. This bond will pay ou 1603 taka every year for the ext…

A: Price of bond will be the present value of future cash flow from the bond and that would be the…

Q: What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5…

A: The price of the bond is equivalent to the sum of the present value of coupon payment plus the…

Q: The par value of 10% debenture is $1,000 with maturity is 3 years. What would be the price if…

A: Data given: Coupon rate = 10% Par value = $1000 n= 3 years Required: Price if interest rate is a)…

Q: A bond with a par value of 2,500 and with a bond rate of 8% payable annually is to be redeemed at…

A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…

Q: A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9%…

A: Given Information:Par value of bond = $1000 Annual coupon rate of bond = 9% (paid semi annually)…

Q: i-annually is redeemable at 97% at the end of 10 years. If the market price is 102, what is the yi

A: The given problem can be solved using RATE function in excel. RATE function computes yield to…

Q: P1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be…

A: The given problem can be solved using RATE function in excel. RATE function computes yield to…

Q: 5. A bond with a par value of P 100,000 and with a bond rate of 10% payable annually is sold now for…

Q: What would be the price of 10 years bond with face value Rs 5000, coupon rate of 10% and required…

A: One of the methods of bond valuation is the discounting cash flow method. Under this method, all the…

Q: A zero coupon bond with a face value of $21,000 matures in 11 years. What should the bond be sold…

A: Zero Coupon bonds: Bonds that experience more fluctuations in market value than coupon bonds and…

Q: What is the current value of a $1,000 bond with a 10% annual coupon rate (paid semi-annually) that…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: Problem 4: A piece of equipment used in a business has a first cost of P 50,000 and is expected to…

Q: A bond with a face value of P1,500,000 is sold at P1,400,000. If the bond matures in 5 years and…

A: Step 1 Bond valuation: It is the cycle to determine the fair value of a bond or present value of a…

Q: three-year coupon bond with 10%annual coupons is selling for $1,100. If you purchase this bond and…

A: Bonds are sources of income and finance for companies and bonds are quite safe and secured sources…

Q: What is the yield, compounded semi-annually, of a $15,000, 5.5% bond with monthly coupons redeemable…

A: All the characteristics of the bond are known. The yield, compounded semi-annually, needs to be…

Q: The annual payment of a 10-year fixed-income security is $50. The payments are made at the end of…

A: Present value of annuity is computed as follows:-PV= A*wherePV= Present value of annuityA= periodic…

Q: Bond C has a $1,000 face value and provides an 8% annual coupon for 30 years. The appropriate…

A: The current price of the value of the bond is equal to the PV of all the coupons payable plus the PV…

Q: In 2020, your firm' s sales were $1,500,000, its net income was $400,000, and the dividend payment…

A: The dividends are the returns provided to the shareholders by the company. The dividend is the…

Q: he pres al discount

A: Given information :

Q: What is the present value of a security that will pay $11200 in 16 years if securities of equal risk…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: Showing your calculations, calculate the price of a $100,000 debenture bond that matures in 15…

A: The price of an asset is computed as the present value of the future cash flows associated with the…

Q: What is the present value of a security that will pay 5, 000 in 20 years if securities of equal risk…

A: solution given Future value 5000 Number of years 20 Interest rate 7% Present…

Q: Suppose a State of Califomla bond will pay 1,000 eight years from now. If the going interest rate on…

A: Worth of the bond can be calculated by discounting the future cash flow of the bond at the given…

Q: What is the current value of a $1,000 par value 10-year bond with a 7% coupon rate and its interest…

A: Following details are given in the question regarding a bond: Coupon rate = 7% Time period = 10…

Q: If a coupon bond that is going to mature in two years is selling at par. Suppose its coupon rate is…

A: Given, Coupon payment is $100 Yield to maturity at beginning is 10% Yield to maturity at end is 5%…

Question

. A bond with a par value of P5,000 and with a bond rate of 9% payable annually is sold now for P5,100. If the yield is to be 12%, how much should the redemption price be at the end of 10 years?

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

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, accounting and related others by exploring similar questions and additional content below.

Similar questions

Help
Bond B is a 2-year maturity coupon-paying bond with annual coupon of 10 and face value of 110. The yield curve is flat at 4% per year. Consider a forward contract F on one bond B. If the forward F's maturity is 15 months from now, what is the no-arbitrage forward price F0, 15 months? Enter your answer with 2 decimal places after the point.
3 A $1000 face value, 8% bond (interest payable semiannually) has 20 years remaining until maturity (at which time it will be redeemed at face value). The rate of return required by the market on this type of bond is 8% compounded semiannually. What is the market value of this bond today?
A $1,000 par value bond with an annual 14% coupon rate will mature in 20 years. Coupon payments are made semiannually. What is the market price if the required annual market rate is 7%?
CALCULATE THE DIRTY AND CLEAN PRICE!! For a $100 par value 5-year bond with 8% coupons paid semiannually and bought to yield 10% compounded semiannually, calculate the dirty and clean price 2 years and 10 months after the date of purchase, using the semi- theoretical method. Assume that each month has exactly 30 days.
If a $1,000 bond with a 4 percent coupon (paid annually) and a maturity date of ten years is selling for $859, what is the current yiled and the yield to maturity?
You will receive $100 from a savings bond in 4 years. The nominal interest rate is 7.90 %. a) What is the present value of the proceeds from the bond? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b) If the inflation rate over the next few years is expected to be 2.90%, what will the real value of the $100 payoff be in terms of today's dollars? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c)What is the real interest rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. d)Calculate the real payoff from the bond [from part (b)] discounted at the real interest rate [ from part (c)]. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
A 1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be redeemed at par at the end of this period. If it is sold now for 1,390, determine the yield at this price. (I ONLY NEED THE CASH FLOW DIAGRAM PLEASSEEE DREW BELOW I )
The present value (price) of a 10 year bond is 938.55 TL if the market quoted yield to maturity is 10%? This bond has a face (par) value of 1,000 TL which is payable annually and matures in 10 years. What is the coupon rate of this bond
A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9% APR compounded semi-annually. What is the price of the bond if the yield-to-maturity is 8% APR compounded semi-annually?
A 25,000 5% bond with coupons payable semi-annually is redeemable at 97% at the end of 10 years. If the market price is 102, what is the yield rate compounded semi-annually? (Yield or Investment Rate)
3. What is the present value of a $20,000 payment you would receive 5 years from now, assuming an annual interest rate of 7%? 4. What is the future value 6 years from now of $15,000 you hold today when the annual interest rate is 4%? 5. What is the current price of a discount bond with a face value of $10,000 and an interest rate of 6%? 1