A company has 15-year bonds with a $5000 maturity value and a quoted coupon rate of 13% paid semiannually. The current yield is 10% compounded semiannually. (Round your answers to thenearest cent.)(a) Compute the price of these bonds.$6152.93(b) Suppose that with 6 years remaining until maturity, the yield rate drops to 9% compounded semiannually. Find the new price of these bonds.$6750.41 X

Present Value (PV) is a financial concept that represents the current value of a sum of money or a…

A company has 15-year bonds with a $5000 maturity value and a quoted coupon rate of 13% paid semiannually. The current yield is 10% compounded semiannually. (Round your nearest cent.) (a) Compute the price of these bonds. $6152.93 (b) Suppose that with 6 years remaining until maturity, the yield rate drops to 9% compounded semiannually. Find the new price of these bonds. $6750.41 x

A company has 15-year bonds with a $5000 maturity value and a quoted coupon rate of 13% paid semiannually. The current yield is 10% compounded semiannually. (Round your nearest cent.) (a) Compute the price of these bonds. $6152.93 (b) Suppose that with 6 years remaining until maturity, the yield rate drops to 9% compounded semiannually. Find the new price of these bonds. $6750.41 x

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

See similar textbooks

Similar questions

Your company wants to raise $8.0 million by issuing 30-year zero-coupon bonds. If the yield to maturity on the bonds will be 5% (annual compounded APR), what total face value amount of bonds must you issue?
Company Z's bonds currently sell for $1233 and have a par value of $1,000. They pay a $110 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,350. What is their yield to call (YTC)?
Subject:- finance
Your company wants to raise $9.0 million by issuing 25-year zero-coupon bonds. If the yield to maturity on the bonds will be 4% (annual compounded APR), what total face value amount of bonds must you issue? The total face value amount of bonds that you must issue is $. (Round to the nearest cent.)
Coca-kula has an 8% coupon bonds that make semiannual payments, and have 14 years remaining to maturity. If the current price for these bonds is $987.24, what is the annualized yield to maturity? A. 8.64% B. 8.15% C. 8.38% D. 8.00%
The bonds of a company have a face value of $1,000, pay an annual coupon of 7%, and have 5 years remaining to maturity. If the market price of these bonds today is $941 their yield to maturity is closest to: Options a) 7.1% b) 7.3% c) 8.3% d) 8.5%
1. Bonds of TLM Corporation with a par value of R1000 sell for R960, mature in five years, and have a 7% annual coupon rate paid semi-annually. Calculate the current yield and the yield to maturity 1. Assume a 10-year, $1,000 par value bond with a 10 percent annual coupon if its required rate of return is 10 percent what is the value of the bond? 2. What would be the value of the bond described in part bif, just after it had been issued, the expected inflation rate rose by 3 percentage points? Would we now have a discount or a premium bond? 3. What would happen to the bonds' value if inflation fell, by 3 %? Would we now have a premium or a discount bond?
A company is going to undertake an issue of $100 million of high yield bonds, with a maturity of 5 years. The bonds are rated BB. The coupon on the bonds is 5%, paid semi-annually. The underwriter is charging a commission of 2%. What is the effective yield on the bonds, from the company's point of view? Group of answer choices 5.46 % 7.00% 5.75% 2.73%
Sanibel Industries has $1000 par value bonds with a coupon rate of 7% per year making semiannual coupon payments. If there are 11 years remaining prior to maturity and these bonds are selling for $1076 what is the annual yield to maturity for these bonds? O A. 1.51% O B. 3.02% O c. 12.10% O D. 6.03%
A twenty-year government bond with a face value of 120$ makes annual coupon payments of 1% and offers a yield of 8% annually compounded.Suppose that one year later the bond yields at 5%. Showing your calculations,a) What return has bondholders earned over the 12-month period? Instead, suppose now that one year later the bond yields at 5.5%.b) What return has bondholders earned over the 12-month period?
Bernard co. has 8% coupon bonds on the market that have 17 years left to maturity. The bonds will make annual payments. If the YTM on these bonds is 9%, what is the current bond price (in $ dollars)? (Assume the face value of the bond is $1,000)
Arnot International's bonds have a current market price of $1,200. The bonds have a 12% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? Round your answer to two decimal places. % What is the yield to call if they are called in 5 years? Round your answer to two decimal places. % Which yield might investors expect to earn on these bonds, and why? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.II. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.III. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. The bond's indenture indicates that the call provision gives…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS