A firm plans to issue 20 years bonds with a 7% annual coupon rate. The face value will be $1000 and the bonds will sell at par. If their investment banker charges them flotation costs of 5%, what will the YTM be on the bonds?
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A firm plans to issue 20 years bonds with a 7% annual coupon rate. The face value will be $1000 and the bonds will sell at par. If their investment banker charges them flotation costs of 5%, what will the YTM be on the bonds?
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- Malenia is looking to purchase a 10-year, $10,000 face value zero coupon bond. Assuming the current cost of debt is 7.00% per year. How much would the price change if the cost of debt rose to 9.00% per year?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?To expand its business, Laris Company would like to issue a bond with par value of $1,000, coupon rate of 15%, and maturity of 20 years from now. What is the value of the bond if the required rate of return is 12%? (Interest is paid annually)
- What is the maximum price you will pay for a bond with a face value of $1,000 and a coupon rate of 14%, paid annually, if you want a yield to maturity of 10%? Assume that the bond will mature in 10 years and the first payment will be received in one year.To expand its business, the ABC factory would like to issue a bond with par value of P1,000, coupon rate of 10 percent, and maturity of 10 years from now. What is the value of the bond if the required rate of return is 8%? *A zera coupon bond with promised payment of $100 to be paid in 5 years has price equal to$80. What is the YTM?
- D Right Side Inc. will offer a coupon of 4% per annum on its much awaited 20-year bonds. By the start of year 5 from now, these bonds would be 2 years old and would likely sell for a price of $70 per bond (face value = $100). Coupons would be paid annually. Assume that the YTM will remain constant over time.The company SunInc wants to launch a new product and therefore needs to raise new financing. SunInc issues a bond with a face value of EUR 1000 and a maturity of 5 years. The coupon rate is EUR 45 and the payment annually. What is the yield to maturity? Please also explain how you calculated it.Help
- An analyst observes a 10- year, 10% semi annual-pay bond. The face amount is £1,000. The analyst believes that the yield to maturity for this bond should be 15% based on this yield estimate, what would be the amount ? what is the method to solve this equation and the solution? Thank you.A zero coupon bond will be worth $10,000 when it matures and is redeemed after 10 years. How much would an investor be willing to pay now for this bond if a 2% per year yield is desired?Suppose we want to purchase a Company XYZzero-coupon bond that has a $1,000 face valueand matures in three years, and we would like toearn a yield of 10% per year on this investment.How much shall we pay for this bond?– Hint: Coupon bond or Zero-coupon bond?