In January 2019, Cannon announced the issuance of a $1.2 billion bond. The bonds have a coupon rate of 6.0% payable semiannually. Assume the bonds have been assigned credit ratings of BBB (stable outlook) by Standard and Poor's, Baa2 (stable outlook) by Moody's, and BBB (stable outlook) by Fitch. Which of the following is true? Choose all that are correct. | The coupon rate on these bonds would have been higher if Standard and Poor's, Moody's, and Fitch had assigned lower credit ratings. The periodic interest payment will be $36 million. | The yield on these bonds would have been lower if Standard and Poor's, Moody's, and Fitch had assigned higher credit ratings. | The periodic interest expense will depend on the bond's coupon rate.

In January 2019, Cannon announced the issuance of a $1.2 billion bond. The bonds have a coupon rate of 6.0% payable semiannually. Assume the bonds have been assigned credit ratings of BBB (stable outlook) by Standard and Poor's, Baa2 (stable outlook) by Moody's, and BBB (stable outlook) by Fitch. Which of the following is true? Choose all that are correct. | The coupon rate on these bonds would have been higher if Standard and Poor's, Moody's, and Fitch had assigned lower credit ratings. The periodic interest payment will be $36 million. | The yield on these bonds would have been lower if Standard and Poor's, Moody's, and Fitch had assigned higher credit ratings. | The periodic interest expense will depend on the bond's coupon rate.

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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You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Williams Company (WICO) Coupon 6.300 7.210 ?? a. Price b. Current yield Maturity January 15, 2043 January 15, 2037 January 15, 2039 % Last Price Last Yield 94.291 ?? 6.20 ?? 94.825 7.02 Estimated $ Volume (000s) 57,371 a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the bond's current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 48,950 43,811
You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Estimated $ Volume Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Coupon 5.700 Williams Company (WICO) 7.150 ?? Maturity January 15, 2037 January 15, 2031 Last Price Last Yield 94.219 ?? (000s) ?? 57,365 6.08 48,944 January 15, 2033 94.765. 6.90 43,805 a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the bond's current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Price b. Current yield $ 2,088 87 6.85%
On September 27, 2015, Koala, Inc. issued a 10 year bond (with a typical $1,000 face value) that had an annual coupon value of $65. [We are assuming that the 2021 coupon has just been redeemed.] Initially, the bond was sold at a discount price of $978. • On September 27, 2021, this bond was selling at a premium for $1,010. • The market rate of interest for a riskless corporate bond, of this maturity (i.e., a Treasury security), was 2.8% on September 27, 2015, which reflects market expectations about future rates of inflation. • The market rate of interest for a riskless corporate bond, of this maturity (i.e., a Treasury security), was 1.9% on September 27, 2021, which reflects market expectations about future rates of inflation. 1. What was the nominal yield on this bond on September 27, 2015? [To 1 decimal place.] 2. What was the current yield on this bond on September 27, 2015? [To 3 decimal places.] 3. What was the yield to maturity for this bond on September 27, 2015? [To 2 decimal…
You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Williams Company (WICO) Coupon 7.200 7.300 ?? a. Price b. Current yield Maturity January 15, 2039 January 15, 2033 January 15, 2035. % Last Price Last Yield 94.399 ?? ?? 6.38 94.915 7.20 Estimated $ Volume (000s) a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the bond's current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 57,380 48,959 43,820
A bond that has a face value of $2,500 and coupon rate of 2.50% payable semi-annually was redeemable on July 1, 2021. Calculate the purchase price of the bond on February 10, 2015 when the yield was 2.75% compounded semi-annually. $0.00 Round to the nearest cent
You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Williams Company (WICO) Coupon rate Coupon 7.000 7.280 ?? % Maturity January 15, 2041 January 15, 2035 January 15, 2037 Last Price Last Yield 94.375 ?? 94.895 ?? 6.34 7.16 Estimated $ Volume (000s) 57,378 What is the coupon rate for the Williams Company bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 48,957 43,818
Please help me. Thankyou.
A $1,000.00, 8.0% Semi-Annual Bond matures on October 1, 2036. The Bond may be called at 102.5 on April 1, 2030. Round ALL final answers to the nearest penny (cent), NO dollar signs, USE commas where needed What is the Value of the bond on April 1, 2024, when the market rate is 7.0% if: The bond is held to maturity and redeemed at par? The bond is called on April 1, 2030 and redeemed at the call value?
You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2018. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2019. On April 15, 2019, the yield to maturity for the bond changed to 5.20%. For your two year anniversary of owning the bond (May 1, 2020), calculate the bond's current yield, the market price of the bond, and the capital gains yeild using the new yield to maturity. Report the percentage to two decimal places
Today is 1 July, 2019. Katrina has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Katrina purchased all instruments on 1 July 2011 to create this portfolio, which is composed of 28 units of instrument A and 44 units of instrument B. • Instrument A is a zero-coupon bond with a face value of $100. This bond matures at par. Its maturity date is 1 January 2029. • Instrument B is a Treasury bond with a coupon rate of j2 = 2.16% p.a. and a face value of $100. This bond matures at par. Its maturity date is 1 January 2022. Calculate the current price of instrument A per $100 face value. Round your answer to four decimal places. Assume the yield rate is j2 = 4.03% p.a. O a. $47.2049 O b. $48.7635 O c. $49.7461 O d. $68.4516
On February 9, 2015, Hunter-Gratzner, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $42. We will assume that the 2022 coupon has just been redeemed. Initially (in 2015), the bond was sold at the premium price of $1,037. On February 9, 2022, this bond was selling for $972. The market rate of interest for a riskless corporate bond, of this maturity (i.e., a U.S. Treasury security), was 1.75% on February 9, 2015, which reflected market expectations about future rates of inflation. The market rate of interest for a riskless corporate bond, of this maturity (i.e., a U.S. Treasury security), was 2.05% on February 9, 2022, which reflects market expectations about future rates of inflation. Question: What was the yield to maturity for this bond on February 9, 2015? [To 2 decimal places.]

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