James Bond bought a ₱100,000 par value bond from MI Inc. with a term of 5 years and a coupon of 6.50% convertible semiannually is purchased to yield 7.50% convertible semiannually. How much is the amortization of the premium/discount in the 8th coupon?

James Bond bought a ₱100,000 par value bond from MI Inc. with a term of 5 years and a coupon of 6.50% convertible semiannually is purchased to yield 7.50% convertible semiannually. How much is the amortization of the premium/discount in the 8th coupon?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

See similar textbooks

Related questions

Q: What is the present value of the coupon payments? What is the present value of the face value of the…

A: Bond: It is a debt instrument issued by the bond issuer for raising capital from the investors. The…

Q: Fingen's 11-year, $1,000 par value bonds pay 11 percent interest annually. The market price of the…

A: Time Duration = 11 years Par Value = $1,000 Coupon Rate = 11% Market price = $1,110 The required…

Q: A newly issued 10-year, $1,000, zero coupon bond just sold for $311.05. What is the implicit…

A: Data given: FV=$1000 n=10 year PV= $311.05 Interest is semiannual compounding.

Q: A $1,000 face value bond issued by the Purud Company currently pays total annual interest of $80 per…

A: In financial calculator: Enter FV = 1000 Enter n = 13 (life of the bond) Enter PMT = 80 (interest)…

Q: Kimberly purchased a $6,500 bond that was paying a 6.75% co annually coupon rate and had 3 more…

A: Bonds are different kinds of debt instruments in which interest is paid annually or periodically and…

Q: P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount…

A: Rate of return to investor will be IRR (internal rate of return). IRR is the rate at which present…

Q: Find the amount of the semi-annual coupon for a 110,000 bond which pays 4.5% convertible…

A: Bond interest is paid by the company semi-annually at the coupon rate affixed to it.

Q: A bond certificate with a value of P 1,081,038.07 has a par value of P 1,000,000.00 and a redemption…

A: Using financial Calculator, PV (Price) = P 1,081,038.07 FV (Face Value) = P 1,030,000.00 N = 10…

Q: What is the coupon payment of a 15 -year $10,000 bond with a 9 % coupon rate with semiannual…

A: Given details are : Face value of bonds =$10000 Time period = 15 years Coupon rate = 9% Coupon…

Q: A one-year premium bond with a face value of $10,000 has been purchased for $11,150. What is the…

A: The following information has been provided in the question: Face value of bond= $10,000 Price of…

Q: Fingen's 12 yr, $1000 par value bonds pay 9% interest annually. The market price of the bonds is…

A: Time = t = 12Face Value = fv = $1000Coupon Rate = c = 9%Current Price of Bond = pv = $1110Required…

Q: 14year

A: A. To compute the bond's yield to maturity, we need to find the rate at which the present value of…

Q: To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in…

A: According to bartleby guidelines , if multiple questions are asked , then 1st question needs to be…

Q: Emma bonds will mature in eight years; the coupon rate of the bond is 6% paid semiannually. If the…

A: Calculation of Selling Price of Bonds Face Value of Bonds = $ 1,000 Annual rate of interest = 6%…

Q: Find the amount of the semi-annual coupon for a P250,000 bond which pays 7% convertible…

A: Bond's coupon payment is the amount paid as an interest to the bondholders at the fixed interest…

Q: Fingen's 14-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the…

A: Yield to maturity is the rate of return that a bondholder will get if they invest in bond and the…

Q: An investor uses £100,000 to buy 7-year bonds with a face value of £100. The bonds pay coupons…

A: Price of the bond refers to the present value of the future earnings and the maturity value at the…

Q: What would be the one-year Holding Period Return for a 7-year, 8% semi-annual coupon bond if the…

A: A bond is a kind of debt security issued by the government and private companies for raising funds…

Q: Fingen's 18-year, $1 comma 000 par value bonds pay 9 percent interest annually. The market…

A: Yield to maturity of a bonds refers to the rate of return that the bond holder will earn if he holds…

Q: Whittier Inc. offers you a $1,000 bond with 5 years to maturity, annual payments. Assume that the…

A: Given: Particulars Par value(FV) 1000 Years (NPER) 5 Rate 8% Coupon rate 10%

Q: The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 11 years until…

A: The face value of the bond is $1,000.The coupon rate is 6%.The maturity is 11 years.The price of the…

Q: Bond Z pays $98 annual interest and has a market value of $870. It has five years to maturity.…

A: Solution Given Annual interest 98 Market value 870 Years to maturity 5 Par…

Q: How much will the coupon payments be of a 10-year $5,000 bond with a 5% coupon rate and semiannual…

A: When a bond's coupon rate is calculated as a percentage of its face value, it indicates the annual…

Q: A 8-year bond with a face value of 1000 dollars earns interest at 9.9 percent convertible…

A: Price of bond is the present value of par value of bond and present value of the redemption value…

Q: A newly issued 10-year, $1,000, zero coupon bond just sold for $311.05. What is the implicit…

A: Face value of the bond (FV) = $1,000 Current price of the bond (P0) = $311.05 Semiannual maturity…

Q: You purchase a 3-year corporate bond, which has a coupon rate of 8%, paid annually. Its par value is…

A: BOND PRICEBond price refers to the current market value of a bond, which is determined by various…

Q: Bank A issues a bond with a maturity of 3 years, par value of $1,000,000, and annual coupon rate of…

A: Bonds seem to be a type of financial instrument that belongs to the fixed-income securities asset…

Q: A 1,000 bond with 6% semiannual coupons is redeemable at 1,050 in 20 years. The bond is selling for…

A: Bonds are is a debt instruments issued by a corporation or government to raise money. The bond…

Q: A bond pays $50,000 per year and has a face value of $500,000 at the end of 8 years when it has to…

A: Annual payment = $ 500 Face value = $ 500,000 Period = 8 Years Current price = $ 390,000

Q: A P10 000.00 bond that pays P300.00 quarterly matures in five years. Determine the discount or…

A: Face value (F) = P 10000 Coupon (C) = P 300 per quarter n = 5 years = 20 quarters YTM = 14% per…

Q: A RM1,000 callable bond with 9% coupons payable semi-annually was redeemed for RM1,100. The bond was…

A: The coupon payment is the annual interest received by the bondholder from the date of issue of the…

Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

James Bond bought a ₱100,000 par value bond from MI Inc. with a term of 5 years and a coupon of 6.50% convertible semiannually is purchased to yield 7.50% convertible semiannually.

How much is the amortization of the premium/discount in the 8th coupon?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

How much is the amortization of the premium/discount in the 8th coupon?
A $1,000 face value bond issued by the Purud Company currently pays total annual interest of $80 per year and has a 13-year life. a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond? b-How would your answer in (a) change if the bond is a U.S. bond? c-How would your answer in (b) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purud bond? d-Suppose the original bond can be purchased for $925. What is the bond's yield to maturity?
A bond pays $50,000 per year and has a face value of $500,000 at theend of 8 years when it has to be redeemed. If its current discounted priceis $390,000, what true interest could be earned on the bond? Ans. (14.9%)
Suppose the investor’s rate is 9% in the ₱50,000, 7.5% bond with coupons paid semi-annually. The bond is redeemable on July 1, 2006 and is now bought on July 1, 1999. Find the price of the bond if the bond is redeemable at par.
The amount of no.3 is to be amortized. Calculate the interest portion of the 4th coupon.
Whittier Inc. offers you a $1,000 bond with 5 years to maturity, annual payments. Assume that the interest rate is 8%, and coupon rate is 10%. How much should you pay for this bond (rounded to integer)? O $1,080.00 O $1,008.00 O $1,000.00 O $1,076.00
Bank A issues a bond with a maturity of 3 years, par value of $1,000,000, and annual coupon rate of 2%. Company B buys this bond at date 0. 1. in this situation, who lends money and who borrows money? 2. what are the cash flows received by B if it decides to hold the bond until maturity?
Kimberly purchased a $6,500 bond that was paying a 6.75% compounded semi- annually coupon rate and had 3 more years to maturity. The yield rate at the time of purchase was 5.75% compounded semi-annually. a. How much did Kimberly pay for the bond? Round to the nearest cent b. What was the amount of premium or discount on the bond?
A newly issued 10-year, $1,000, zero coupon bond just sold for $311.05. What is the implicit interest, in dollars, for the first year of the bond's life? Assume semiannual compounding. Please show how this can be set up in Excel, thank you.
Find the nominal value and the time to redemption of 10 (the same) zero-coupon bonds, if they can be used to immunise the following liability: 15000PLN paid in 2 years and 10000 paid in 3 years. The rate of return on this market is 5% (for all terms). A- BI II
A 8-year bond with a face value of 1000 dollars earns interest at 9.9 percent convertible semiannually. If the bond sells for 1096.14 dollars to yield an investor 7.8 percent convertible semiannually, what is the redemption value? Answer = dollars.
Fingen's 14-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $1,100 and the market's required yield to maturity on a comparable-risk bond is 6 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond?