Problem 7-2 Interest Payments (LG7-1)Determine the interest payment for the following three bonds. (Assume a $1,000par value.) (Round your answers to 2 decimal places.)4.30 percent coupon corporate bond (paid semiannually)4.95 percent coupon Treasury noteCorporate zero-coupon bond maturing in ten years

The bond can be referred to as the debt kind of financial instrument which is issued for fixed…

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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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Pet Food Company bonds pay an annual coupon rate of 8.51 percent. Coupon payments are paid semiannually. Bonds have 7 years to maturity and par value of $1,000. Compute the value of Pet Food Company bonds if the market interest rate on this type of bond is 8.22 percent. Round the answer to two decimal places. Your Answer: Answer
A company issues a ten-year bond at par with a coupon rate of 6.6% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 8.6%. What is the new price of the bond? O A. $1.240 O B. $886 O C. $1,063 O D. $1,000
Find the total proceeds (in $) from the sale of 20 bonds with a coupon rate of 8.25 and a current price of 96.375. (Round your answer to the nearest cent.) The commission charge is $4.00 per bond. The date of the transaction is 145 days since the last interest payment.
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Find the total proceeds (in $) from the sale of 20 bonds with a coupon rate of 6.25 and a current price of 96.975. (Round your answer to the nearest cent.) The commission charge is $4.00 per bond. The date of the transaction is 145 days since the last interest payment. $
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) Note: Round your answers to 2 decimal places. 3.60 percent coupon corporate bond (paid semiannually) 4.35 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years
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Bond of $ 1000 par value issued at $996 . Coupon rate 3.8% ,coupon paid at the end of every year. Bond will be repaid at $ 1002 i.e. $ 2 on redemption of the bond. Bond will mature after 5 years. The corporate tax rate is 30%. Calculate cost of bond.
2. Deccan Corporation issued 10% 1,000,000 bond on January 1.2011 The market rate of interest is 12% Interest is paid semi annual The term of the bond is 5 years. V. How much would an investor pay for this bond? VI. Make Journal entries to record the receipt of cash from the sale of the bond in Deccan Corporations books VII. Amortize the bond discount over the term of bond using a. Straight line Method b. interest rate method VIII. Make Journal entries to record the payment of interest on 31 December 2011.
A 25-year bond issue of 5,900,000 and bearing interest at 6.5% payable annually is sold to yield 6.65% compounded semi-annually. What is the issue price of the bonds? The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 4.30 percent coupon corporate bond (paid semiannually) 4.95 percent coupon Treasury note Corporate zero-coupon bond maturing in ten years