Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 8.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,065.00. Given your answer to the 6-month return, what is the yield to maturity (as an EAR) for holding the bond? Submit
Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 8.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,065.00. Given your answer to the 6-month return, what is the yield to maturity (as an EAR) for holding the bond? Submit
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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Transcribed Image Text:Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of
8.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and
were issued at par value. Cinqua Terra bonds currently trade at $1,065.00.
Given your answer to the 6-month return, what is the yield to maturity (as an EAR) for holding
the bond?
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required.
Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
Munich-style Beerhouse is going to finance a new brewery using a debt issue. The company
needs to raise $13.00 million today. An investment bank has suggested issuing 8-year bonds,
with a 7.00% APR annual coupon, and a face value of $20.00 million. What yield to maturity
is the investment bank placing on Munich-style bonds if they offer with these terms?
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required.
Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
Bavarian Pretzel Haus is going to finance a new pretzel factory using a debt issue. The
company needs to raise $10.00 million today. An investment bank has suggested issuing 10-
year bonds, with a 7.00% APR semi-annual coupon, and a face value of $11.00 million. What
yield to maturity is the investment bank placing on Bavarian Pretzel Haus bonds if they offer
with these terms (Express as an EAR)?
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required.
Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
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