Determine the price of a $1.3 million bond issue under each of the following independent assumptions:1. Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%.2. Maturity 10 years, interest paid semiannually, stated rate 8%, effective (market) rate 10%.3. Maturity 10 years, interest paid semiannually, stated rate 10%, effective (market) rate 8%.4. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 8%.5. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%.Note: Use tables, Excel, or a financial calculator. (FV of S1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1.)Complete this question by entering your answers in the tabs below.Required 1Required 3Required 2Required 4Required 5Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%.Note: Round your answer to the nearest whole dollar.Price of bondsRequired 2 >Next

Bonds/Notes are the instruments/ securities issued by the companies to raise funds for the company…

Answered: Determine the price of a $1.3 million…

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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Use the following tables to calculate the present value of a $672,000, 6%, 6-year bond that pays $40,320 ($672,000 x 6%) interest annually, if the market rate of interest is 7%. Present Value of $1 at Compound Interest Periods 6% 7% 1 0.94340 0.93458 0.90909 2 0.89000 0.87344 0.82645 3 0.83962 0.81630 0.75131 4 0.79209 0.76290 0.68301 5 0.74726 0.71299 0.62092 6 0.70496 0.66634 0.56447 7 0.66506 0.62275 0.51316 8 0.62741 0.58201 0.46651 9 0.59190 0.54393 0.42410 0.55839 0.50835 0.38554 10 Present Value of Annuity of $1 at Compound Interest Periods 1 2 3 4 5 6 7 8 9 5% 10 0.95238 0.90703 0.86384 0.82270 0.78353 0.74622 0.71068 0.67684 0.64461 0.61391 5% 0.95238 1.85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 6% 0.94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 7% 0.93458 1.80802 2.62432 10% 10% 3.38721 4.10020 4.76654 5.38929 5.97130 6.51523 5.75902 7.02358 6.14457 Round your intermediate calculations and final answer to the nearest…
Determine the purchase price at the indicated time before maturity of the following bond redeemed at par shown in the table below. Par Value Bond Rate Payable Semi-Annually Time Before Redemption Yield Rate Conversion Period $30,000 9.5% 10.5 vears 9% monthly The purchase price of the bond is S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if the bond's YTM is 12% and interest is paid semiannually. I have the answer, 2.71 Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places. Assuming the bond's YTM goes from 12% to 10.5%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal places. Use a minus sign to enter a negative value, if any. This is the question I'm struggling to find.
Calculate the value of each bond and discuss whether it sells at par, discount, or premium. (Annual interest rate) O A. Bond Bond Value A B C O B. Bond A B C O C. Bond A B с O D. Bond A B C $1,149.39 Discount $1,000.00 Par $85.60 Premium Bond Value Sells at par/discount/premium Bond Value $1,149.39 Premium $1,000.00 Par $85.60 Discount Sells at par/discount/premium Bond Value Sells at par/discount/premium $1,149.39 Premium $1,000.00 Par $85.60 Premium Sells at par/discount/premium $1,049.39 Premium $1,100.00 Premium $85.60 Discount Bond Par value Coupon interest Years to rate maturity JA B IC $1000 14% $1000 18% $100 10% 120 16 18 Required return 12% 8% 13%
Calculate the Macaulay duration of an 11%, $1,000 par bond that matures in three years if the bond's YTM is 12% and interest is paid semiannually. Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places. years Assuming the bond's YTM goes from 12% to 11.0%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal places. Use a minus sign to enter negative value, if any. %
a 29000 bond with interest at 5.1% payable semi annually and redeemable ar par is bought two years before maturity to yield 7.8% compunded semi annually. complete the premium or discount and the purchase price and construct the appropriate bond schedule
Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be redeemed at par. Bond Rate Face Value $5,000 Payable Semi-annually Time Before Redemption 7 years 5% Market Quotation 103.375 The yield rate is%. (Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)
Determine the price of a $1.9 million bond issue under each of the following independent assumptions: Maturity 10 years, interest paid annually, stated rate 6%, effective (market) rate 9%. Maturity 10 years, interest paid semiannually, stated rate 6%, effective (market) rate 9%. Maturity 10 years, interest paid semiannually, stated rate 9%, effective (market) rate 6%. Maturity 20 years, interest paid semiannually, stated rate 9%, effective (market) rate 6%. Maturity 20 years, interest paid semiannually, stated rate 9%, effective (market) rate 9%.
Determine the price of a $380,000 bond issue under each of the following independent assumptions: Note: Use tables, Excel, or a financial calculator. Round your intermediate calculations and final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. 2 N 3. Face value 380,000 380,000 380,000 Maturity 10 years 10 years 20 years Interest Paid annually semiannually semiannually Stated Rate 11% 11% 10% Effective Rate 11% 12% 10% Price
A $27,000 bond with interest at 5.3% payable semi-annually and redeemable at par is bought two years before maturity to yield 6.6% compounded semi-annually. Compute the premium or discount and the purchase price, and construct the appropriate bond schedule.
If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest semiannually would sell at an amount ☐ a. equal to the face value b. greater than face value c. that cannot be determined d. less than face value
Consider a newly issued 4-year, 3.11% annual-pay bond trading at par. The present values of each of the bond’s promised payments, discounted at 6.11%. Its Macaulay duration is closest to A. 3.625 years. B. 3.723 years. C. 3.811 years. D. 3.924 years.

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