A $2,500 par value bond matures in 20 years and has a coupon rate of 8.5%. If the market'srequired yield to maturity for similar rated debt is 7.5%, what is the price of bond?The preferred stocks of a company pays a dividend of $1.50 at the end of each quarter, and itsells for $85 per share. What is the annual effective yield rate of the stock?7 A- B I G EE 8 3

To calculate the price of the bond following data will be fed in excel to calculate present value of…

Answered: A $2,500 par value bond matures in 20…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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AEP has a 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 11 years from now?
A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for $985. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $
A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with semi-annual payment, and yield to maturity (YTM) of 4.32%. Let’s assume that in 5 years, the YTM on this increases to 5.13%. What will the $price be for this bond in 5 years?
Assume the current Treasury yield curve shows that the spot rates for six months, one year, and one and a half years are 1.0%, 1.1%, and 1.3%, all quoted as semiannually compounded APRs. What is the price of a $1,000 par, 4.75% coupon bond maturing in one and a half years (the next coupon is exactly six months from now)? The price of this bond is $ (Round to the nearest cent.)
What is the current yield for a bond that has a coupon rate of 8.7% paid annually, a par value of $1000, and 21 years to maturity? Investors require a return of 12.6% from the bond. ( Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34)
Assume the current Treasury yield curve shows that the spot rates for six months, one year, and one and a half years are 1.0%, 1.1%, and 1.3%, all quoted as semiannually compounded APRs. What is the price of a $1,000 par, 4.25% coupon bond maturing in one and a half years (the next coupon is exactly six months from now)? The price of this bond is $ (Round to the nearest cent.)
A 10 year bond with 5% annual coupon and $1,000 par value sells for $1,200. What is the yield-to-maturity?
Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity 1 YTM(%) 5.6% 2 3 4 6.6 7.1 7.6 According to the expectations hypothesis, what is the market's expectation of the yield curve one year from now? Specifically, what are the expected values of next year's yields on bonds with maturities of (a) one year? (b) two years? (c) three years? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) APCO D Bond Years to Maturity YTM (%) B 1 % C 2 % D 3 %
A bond that matures in 17 years has a $1,000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? a. The value of this bond if it paid interest annually would be $ (Round to the nearest cent.)
What is the yield to maturity of a eight-year, $10,000 bond with a 5% coupon rate and semiannual coupons if this bond is currently trading for a price of $9,682?
A unique 30-year bond matures in 10 years sells for $1050, has a $1,000 face value, pays interest monthly, and has a yield to maturity of 10.5883%. What is the annual coupon rate? What is the bond’s current yield?
A firm's bond has a maturity of 10 years with a $1,000 face value, have a 8% coupon rate paid semi-annually. The bonds are callable in 5 years at $1,050. They currently sell at a price of $1,100. What is Yield to maturity?

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