Florida International Bank (FIB) purchased a corporate bond with a coupon rate of 5.5% and a face value of $1000. It has 11 years to maturity and is currently selling in the market for $821.53. The bond makes annual coupon payments. Florida International Bank (FIB) is planning on selling this bond at the end of 5 years for $934.86 (ex-interest). What is the holding period yield (HPY) on this bond?
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- BANK ABC purchased a corporate bond with a coupon rate of 5.5% and a face value of $1000. It has 11 years to maturity and is currently selling in the market for $821.53. The bond makes annual coupon payments. BANK ABC is planning on selling this bond at the end of 5 years for $934.86 (ex-interest). What is the holding period yield (HPY) on this bond? 4.7% 5.5% 7% 8% 9% Give typing answer with explanation and conclusionTo help finance a major expansion, GAMA Company sold a bond with 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $1,075, and has a par value of $1,000. What is the component cost of debt for use in the WACC calculation? Show work in excel and explain answerWildhorse, Inc., has four-year bonds outstanding that pay a coupon rate of 6.4 percent and make coupon payments semiannually. If these bonds are currently selling at $914.89. What is the yield to maturity that an investor can expect to earn on these bonds? Assume face value is $1,000. (Round answer to 1 decimal place, e.g. 15.2 %.) Yield to maturity % What is the effective annual yield? (Round answer to 1 decimal place, e.g. 15.2 %.) Effective annual yield %
- Draiman Corporation has bonds on the market with 14.5 years to maturity, a YTM of 10.2 percent, a par value of $1,000, and a current price of $953. The bonds make semiannual payments. What must the coupon rate be on the bonds? (Hint: The coupon rate is always quoted as an annual rate! The coupon rate is calculated by adding up the total amount of payments in a year made by a bond, then dividing it by the face value of the bond.) Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Coupon rate %Charlton Wineries (CW) has outstanding 10-year, €1,000 face value bonds with a 6% coupon rate (semi-annual payments). The bonds are callable in five years and thereafter at par value (on a coupon date). The bonds were issued one year ago and currently sell for €1,050. What is the yield to maturity of the bonds? What is the yield to call? What is the yield to worst?Carla Vista, Inc., has bonds outstanding that will mature in eight years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $895.92, what is the yield to maturity that an investor who buys them today can expect to earn? (Round answer to 3 decimal place, e.g. 5.275%.) Yield to maturity % What is the effective annual yield? (Round answer to 3 decimal places, e.g. 5.275%.) Effective annual yield %
- Rove Enterprises has bonds on the market making annual payments, with 10 years to maturity, and selling for $935. At this price, the bonds yield 6%. a) What is the value of the yearly coupon payment on Rove Enterprises' bonds? b) What must the coupon rate be on the bonds? c) Are the bonds of Rover Enterprises considered discount bonds or premium bonds and why?The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 15.65%. TheBIVA Bank purchased GHS 40 million of the bonds when the current yield of the bond was 15% on the market.a) Calculate the duration of the bond. b) An analyst with The BIVA Bank forecasts that the interest rate will rise by 0.5% next month. What is the percentage change in the price of the bond?c) What is the cedi change in the price of the bond? Calculate the new price of the bond on the market. d) Outline four (4) limitations of gap analysis.3) Sari Minerals Co. issued 15-year bonds three years ago with a coupon rate of 5%. These bonds make semiannual payments. If these bonds are currently selling for $950, what is their Yield to Maturity (YTM)
- Thatcher Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8 percent coupon rate, paid semiannually. The price of the bond is $1,100. What is the firm’s cost (percentage rate) of borrowing money under these market conditions?Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 6.5%, payable annually, and a par value of $1,000. The 1-year interest rate is 6.5%. Next year, there is a 35% probability that interest rates will increase to 8% and a 65% probability that they will fall to 5%. What will the market value of these bonds be if they are noncallable?Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 7 percent, payable annually, and a par value of $1,000. The one-year interest rate is 7 percent. Next year, there is a 40 percent probability that interest rates will increase to 9 percent and a 60 percent probability that they will fall to 6 percent. a. What will the market value of these bonds be if they are noncallable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the company decides instead to make the bonds callable in one year, what coupon rate will be demanded by the bondholders for the bonds to sell at par? Assume that the bonds will be called if interest rates fall and that the call premium is equal to the annual coupon. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What will be the value of the call provision to the company? (Do not round…