Bond X has a premium bond making semiannual payments. The bond pays a coupon of 8 percent, has a YTM of 6 percent, and has 20 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon of 6 percent, has a YTM of 8 percent, and also has 20 years to maturity. Both bonds have a par value of $1,000. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 6 years? In 12 years? In 17 years? In 20 years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Price today 1 year 6 years 12 years 17 years 20 years Bond X Bond Y

Bond X has a premium bond making semiannual payments. The bond pays a coupon of 8 percent, has a YTM of 6 percent, and has 20 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon of 6 percent, has a YTM of 8 percent, and also has 20 years to maturity. Both bonds have a par value of $1,000. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 6 years? In 12 years? In 17 years? In 20 years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Price today 1 year 6 years 12 years 17 years 20 years Bond X Bond Y

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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There is a bond that has a quoted price of 940.023 and a par value of $1,000. The coupon rate is 7 percent and the bond matures in 13 years. The bond makes semiannual coupon payments a) Will the YTM be greater or less than the coupon rate? Explain your reason why b) Calculate the 7TM for the bond. Please be sure to show your calculations (if using a financial calculator, provide the input values used)
A $1,000 bond has a coupon of 4 percent and matures after tên years. ASsume that the bond pays interest annually. a. What would be the bond's price if comparable debt yields 6 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ b. What would be the price if comparable debt yields 6 percent and the bond matures after five years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. c. Why are the prices different in a and b? The price of the bond in a is -Select- v than the price of the bond in b as the principal payment of the bond in a is -Select- v than the principal payment of the bond in b (in time). d. What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after ten years: CY: % YTM: % The bond matures after five years: CY: YTM:
Suppose that a bond pays semiannual coupons in the sequence 25, 30, 25, 35, 25, 40, ..., 25, 85. If the redemption value is 2500 dollars and the yield rate is 8.6 percent convertible semiannually, what is the price of the bond? Answer= dollars.
Please give me answer very fast in 5 min saur
You purchase a bond with an invoice price of $1,014. The bond has a coupon rate of 9 percent, and there are 2 months to the next semiannual coupon date. What is the clean price of the bond? Enter the answer with 2 decimals (e.g. 954.23).
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9 percent, a YTM of 7 percent, and 15 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7 percent, a YTM of 9 percent, and also has 15 years to maturity. Both bonds have a par value of $1,000. a. What is the price of each bond today? b. If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 6 years? In 10 years? In 14 years? In 15 years? Note: For all requirements, do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Price today b. Price in 1 year Price in 6 years Price in 10 years Price in 14 years Price in 15 years Bond X Bond Y
MaxValue is expected to have EBIT of $1,500,000.00 one year from now. Because MaxValue is in a mature industry, the CEO expects the company's EBIT to grow at the stable growth rate of 2% per year forever. The firm's WACC is 9% and its corporate tax rate is 40%. Capital expenditures are 25% of EBIT while changes in networking capital is 10% of EBIT. Depreciation is 15% of EBIT. What is the value of the firm? a) $21,428,571.43 b) $8,742,857.14 c) $17,142,857.14 d) $8,571,428.57 e) $16,071,428.57
You want to determine the value of your company bond that you have held. The market has not traded your security in a long time but still makes payments semiannually 6.2% coupon and 7 years. You find two similar bonds with characteristics as follows. Bond X: 4-year 6% coupon priced at 950 Bond Y: 6-year 5% coupon priced at 980, 1000 bond value a. What is the approximate price of your bond? b. How does your bond compare to the other two bonds?
Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 7 percent, has a YTM of 5 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 5 percent, has a YTM of 7 percent, and also has 13 years to maturity. The bonds have a $1,000 par value. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In four years? In nine years? In 11 years? In 13 years?
Suppose that the term structure of interest rates is: Interest rates are annual interest rates that are semi-annually compounded. Calculate the price and modified duration of a 1 -year bond with a 6% coupon rate, with coupons paid semi-annually. The bond has a face value of 100.0 Calculate the price and modified duration of a 2 -year bond with a 10% coupon rate, with coupons paid semi-annually. The bond has a face value of 100.0 Compare your results from 1 and 2 above. Which bond is more sensitive to changes in interest rates?
Let's denote the price of a nonmaturing bond (called a consol) as P. The equation that indicates this price is Pn =-, where I is the annual net income the bond generates and r is the nominal market interest rate. a. Suppose that a bond promises the holder $200 per year forever. The nominal market interest rate is 6 percent. Calculate the bond's current price: S. (Round your answer to the nearest whole dollar.)
A bond is currently selling for $1040. It pays the amounts listed in the picture at the ends of the next six years. The yield of the bond is the interest rate that would make the NPV of the bond’s payments equal to the bond’s price. Use Excel’s Goal Seek tool to find the yield of the bond.

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