Keenan Industries has a bond outstanding with 25 years to maturity, an 8.05%nominal coupon, semiannual payments, and a $1,000 par value. The bond has a7.10% nominal yield to maturity, but it can be called in 4 years at a price of $1,100.wis the bond's nominal yield to call? Do not round your intermediatensweredcalculations.O a. 5.17%Ob. 7.04%c. 3.52%O d. 7.31%Oe. 6.80%Icon KeyQuestion 12 of 16 ▸SaveSubmit AssignmentNA+

Step 1: Calculate the Semiannual Coupon PaymentThe bond has a nominal coupon rate of 8.05% and a par…

Answered: Keenan Industries has a bond…

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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a $1000 face value bond has a 9.0% coupon and pays interest semiannually. The bond matures in 2 yeas and has a yield to maturity of 6.5%. what is the Macaulay duration? *Please show work, DO NOT USE EXCEL*
Your firm has issued 15-year $1000 par value bonds with 8.5% annual coupon rate. If annual coupon rates on similar bonds are now 8.5%, what could you sell your bond for today assuming semi-annual compounding? O A. $990 O B. $1000 OC. $1085 O D. Sufficient information not provided.
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D Bond P is a premium bond with a 9 percent coupon. Bond D is a 4 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 6 percent, and have four years to maturity. What is the current yield for Bond P and Bond D? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Bond P Bond Current yield 8.15% 4.30 % If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P and Bond D? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))) Bond P Bond D Capital gains yield -2.15 % 1.70 %
Your firm has issued 15-year zero-coupon bonds with a $1000 face value. If the bonds are currently selling for $585, what is the annual yield to maturity, assuming semiannual compounding? O A. 2.77% O B. 3.61% OC. This question cannot be answered because there is no coupon payment provided. O D. 1.80%
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Determine the selling price PV, per $1,000 maturity value, of the bond. HINT [See Example 8.] (Assume twice-yearly interest payments. Do not round those payments to the nearest cent. Round your final selling price to the nearest cent.) 5 year, 4.375% bond, with a yield of 4.485% PV = $

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