A company issued bonds with 7.7% coupons paid annually (once per year), $1,000 face value, and 10 years left to maturity. If the YTM in the market for similar bonds is 9.7%, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34.) Current bond price

A company issued bonds with 7.7% coupons paid annually (once per year), $1,000 face value, and 10 years left to maturity. If the YTM in the market for similar bonds is 9.7%, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34.) Current bond price

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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Problem: A company has issued three bonds (Par Value S1,000) with the following data: What happends to the bond prices as each bond approaches the maturity date? (assume similar bonds with 15 year maturity sell for 10% coupon rate and that this rate stays const. over time) Market rate 10% 5-years ago 10-years ago 25 year bond Issue date Maturity Coupon rate Coupon Payment Today 15 year bond 10% 20 year bond 7% 13% 70 100 130 15 15 15 Positive Values Positive Values Positive Values 6. 8. 9. 10 11 12 13 14
A firm issues zero-coupon bonds with a face value of $1,000 and time to maturity of 26 months. The bonds are currently trading at $751.4. What is the annual yield on this bond? Answer in percent, rounded to one decimal place (5.428% --> 5.4).
A corporate bond has 23 years to maturity, a face value of $1,000, a coupon rate of 5.5%, and pays interest semiannually. The annual market interest rate for similar bonds is 3.3%. Part 1 What is the value of the bond? 0+ decimals
Draiman Corporation has bonds on the market with 23.5 years to maturity, a YTM of 7 percent, a par value of $1,000, and a current price of $1,051. The bonds make semiannual payments. What must the coupon rate be on these bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Wildhorse Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent and a yield to maturity of 6.0 percent. Assume face value is $1,000. Problem 8.30(a) Your answer is incorrect. Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.) Current price $ EA
You are analyzing the cost of debt for a firm. You know that the firm’s 14-year maturity, 8.6 percent coupon bonds are selling at a price of $849.00. The bonds pay interest semiannually. If these bonds are the only debt outstanding for the firm, answer the following questions. What is the current YTM of the bonds? (round intermediate calculations to 4 decimal places, and final answer to 0 decimal places) What is the after-tax cost of debt for this firm if it has a 30 percent marginal and average tax rate? (Round final answer to 2 decimal places, e.g. 15.25%.)
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7.6% (annual payments). The yield to maturity on this bond when it was issued was 5.7%. What was the price of this bond when it was issued? www When it was issued, the price of the bond was $. (Round to the nearest cent.)
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,200. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % Would an investor be more likely to earn the YTM or the YTC? -Select- b. What is the current yield? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Round your answer to two decimal places. % Is this yield affected by whether the bond is likely to be called? I. If the bond is called, the capital gains yield will remain the same but the current yield will be different. II. If the bond is called, the current yield and the capital gains yield will both be different. III. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be…
1 Leechtown Co. has 4.3% coupon bonds on the market with 18 years left to maturity. The bonds make annual payments. If the bond currently sells for $870, what Is Its YTM? (Do not round Intermediate calculations. Round the final answer to 2 decimal places.) Yield to maturity
An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is using duration as its measure of interest rate risk. What is the duration of each of the three bonds? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. $10,000 par value, coupon rate=9.7%, r 0.17 b. $10,000 par value, coupon rate 11.7%, r= 0.17 c. $10,000 par value, coupon rate = 13.7%, p=0.17 Duration of the bond years
Dufner Co. issued 16-year bonds one year ago at a coupon rate of 7.2 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.5 percent, what is the current dollar price assuming a par value of $1,000? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price
Dufner Co. issued 13-year bonds one year ago at a coupon rate of 8 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.7 percent, what is the current dollar price assuming a par value of $1,000? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price

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