Homework Help is Here – Start Your Trial Now!
Business
Finance
Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 13 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) a. 30 years b. 16 years c. 7 year Bond Price

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 13 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) a. 30 years b. 16 years c. 7 year Bond Price

Essentials Of Investments
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
See similar textbooks
icon
Related questions
Question
Please don't give image format
Problem 10-6 Bond value [LO10-3] Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 13 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) a. 30 years b. 16 years c. 7 year Bond Price
Transcribed Image Text:Problem 10-6 Bond value [LO10-3] Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 13 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) a. 30 years b. 16 years c. 7 year Bond Price
Period 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 88888 25 30 40 50 Period 1 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 1% 0.990 0.980 40 50 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.125 0.111 0.098 0.820 0.804 0.788 0.087 0.047 0.026 0.773 0.758 0.743 0.728 Appendix B (concluded) Present value of $1 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372 0.333 0.308 0.295 0.270 0.261 0.237 0.231 0.208 0.204 0.182 3% 0.971 0.943 0.915 0.888 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.108 0.095 0.083 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 0.073 0.038 0.020 0.307 0.228 0.181 0.160 0.141 0.140 0.123 0.160 0.123 0.107 0.141 0.008 0.005 0.002 0.001 13% 14% 15% 16% 0.885 0.877 0.870 0.862 0.783 0.769 0.756 0.743 0.693 0.675 0.658 0.641 0.613 0.592 0.572 0.552 0.543 0.519 0.497 0.476 0.480 0.456 0.432 0.425 0.400 0.376 0.351 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.375 0.308 0.208 0.141 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.295 0.231 0.142 0.087 0.003 0.001 0 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 Percent 0.558 0.527 0.497 0.043 0.020 0.009 0.002 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 0.054 0.390 0.370 0.314 18% 17% 0.855 0.847 0.731 0.718 0.624 0.609 0.593 0.534 0.515 0.456 0.437 0.093 0.080 0.069 0.060 0.051 0.081 0.069 0.059 0.070 0.060 0.051 0.043 0.061 0.051 0.030 0.024 0.015 0.012 0.004 0.001 7% 0.935 0.873 0.037 0.016 0.007 0.001 0 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.184 0.131 0.067 0.034 0.410 0.354 0.333 0.305 0.285 0.266 0.376 0.327 0.284 0.263 0.243 0.225 0.247 0.227 0.208 0.191 0.215 0.195 0.178 0.162 0.187 0.168 0.152 0.137 0.163 0.145 0.130 0.116 0.099 0.088 0.125 0.111 0.108 0.095 0.093 0.081 0.084 0.074 0.071 0.062 Percent 19% 0.840 0.706 0.499 0.419 0.352 0.296 0.249 20% 0.833 0.694 0.052 0.044 0.037 0.579 0.482 0.402 0.194 0.162 0.078 0.065 0.054 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.045 0.038 0.031 0.583 0.540 0.500 0.031 0.026 0.013 0.010 0.005 0.004 0.001 0.001 0 0 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.335 0.262 0.279 0.210 0.233 0.168 0.134 0.107 0.209 0.176 0.148 0.135 0.086 0.112 0.124 0.104 0.093 0.270 0.250 0.232 0.215 0.146 0.099 0.046 0.021 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 25% 0.800 0.640 0.512 0.410 0.328 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.012 0.004 0.001 0 0 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.116 0.075 0.032 0.013 0.207 0.159 0.123 10% 0.909 0.826 0.094 0.073 0.056 0.043 0.069 0.055 0.033 0.044 0.035 0.028 0.023 0.018 0.014 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.092 0.057 0.022 0.009 11% 0.901 0.812 0.037 0.027 0.020 0.731 0.659 0.593 0.535 od do 00 0.482 0.434 0.391 0.002 0.352 0.317 0.286 0.258 0.232 0.209 0.188 30% 0.769 0.592 0.455 0.406 0.364 0.350 0.301 0.260 0.269 0.223 0.186 0.001 0.170 0.153 0.138 35% 0.741 0.549 0.510 0.124 0.074 0.044 0.015 0.005 0.165 0.133 0.122 0.095 0.091 0.068 0.067 0.050 40% 0.714 0.025 0.015 0.009 0.020 0.011 0.006 0.015 0.008 0.005 0.012 0.003 0.006 0.005 0.002 0.009 0.007 0.003 0.002 0.005 0.001 0 0 0 0.048 0.035 0.025 0.018 0.013 0.001 0 0 12% 0.893 0.797 0 0 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 0.011 0.003 50% 0.667 0.444 0.296 0.198 0.132 0.088 0.059 0.039 0.026 0.017 0.012 0.008 0.005 0.003 0.002 0.002 0.001 0.001 0 oooooo 0
Transcribed Image Text:Period 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 88888 25 30 40 50 Period 1 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 1% 0.990 0.980 40 50 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.125 0.111 0.098 0.820 0.804 0.788 0.087 0.047 0.026 0.773 0.758 0.743 0.728 Appendix B (concluded) Present value of $1 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372 0.333 0.308 0.295 0.270 0.261 0.237 0.231 0.208 0.204 0.182 3% 0.971 0.943 0.915 0.888 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.108 0.095 0.083 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 0.073 0.038 0.020 0.307 0.228 0.181 0.160 0.141 0.140 0.123 0.160 0.123 0.107 0.141 0.008 0.005 0.002 0.001 13% 14% 15% 16% 0.885 0.877 0.870 0.862 0.783 0.769 0.756 0.743 0.693 0.675 0.658 0.641 0.613 0.592 0.572 0.552 0.543 0.519 0.497 0.476 0.480 0.456 0.432 0.425 0.400 0.376 0.351 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.375 0.308 0.208 0.141 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.295 0.231 0.142 0.087 0.003 0.001 0 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 Percent 0.558 0.527 0.497 0.043 0.020 0.009 0.002 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 0.054 0.390 0.370 0.314 18% 17% 0.855 0.847 0.731 0.718 0.624 0.609 0.593 0.534 0.515 0.456 0.437 0.093 0.080 0.069 0.060 0.051 0.081 0.069 0.059 0.070 0.060 0.051 0.043 0.061 0.051 0.030 0.024 0.015 0.012 0.004 0.001 7% 0.935 0.873 0.037 0.016 0.007 0.001 0 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.184 0.131 0.067 0.034 0.410 0.354 0.333 0.305 0.285 0.266 0.376 0.327 0.284 0.263 0.243 0.225 0.247 0.227 0.208 0.191 0.215 0.195 0.178 0.162 0.187 0.168 0.152 0.137 0.163 0.145 0.130 0.116 0.099 0.088 0.125 0.111 0.108 0.095 0.093 0.081 0.084 0.074 0.071 0.062 Percent 19% 0.840 0.706 0.499 0.419 0.352 0.296 0.249 20% 0.833 0.694 0.052 0.044 0.037 0.579 0.482 0.402 0.194 0.162 0.078 0.065 0.054 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.045 0.038 0.031 0.583 0.540 0.500 0.031 0.026 0.013 0.010 0.005 0.004 0.001 0.001 0 0 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.335 0.262 0.279 0.210 0.233 0.168 0.134 0.107 0.209 0.176 0.148 0.135 0.086 0.112 0.124 0.104 0.093 0.270 0.250 0.232 0.215 0.146 0.099 0.046 0.021 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 25% 0.800 0.640 0.512 0.410 0.328 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.012 0.004 0.001 0 0 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.116 0.075 0.032 0.013 0.207 0.159 0.123 10% 0.909 0.826 0.094 0.073 0.056 0.043 0.069 0.055 0.033 0.044 0.035 0.028 0.023 0.018 0.014 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.092 0.057 0.022 0.009 11% 0.901 0.812 0.037 0.027 0.020 0.731 0.659 0.593 0.535 od do 00 0.482 0.434 0.391 0.002 0.352 0.317 0.286 0.258 0.232 0.209 0.188 30% 0.769 0.592 0.455 0.406 0.364 0.350 0.301 0.260 0.269 0.223 0.186 0.001 0.170 0.153 0.138 35% 0.741 0.549 0.510 0.124 0.074 0.044 0.015 0.005 0.165 0.133 0.122 0.095 0.091 0.068 0.067 0.050 40% 0.714 0.025 0.015 0.009 0.020 0.011 0.006 0.015 0.008 0.005 0.012 0.003 0.006 0.005 0.002 0.009 0.007 0.003 0.002 0.005 0.001 0 0 0 0.048 0.035 0.025 0.018 0.013 0.001 0 0 12% 0.893 0.797 0 0 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 0.011 0.003 50% 0.667 0.444 0.296 0.198 0.132 0.088 0.059 0.039 0.026 0.017 0.012 0.008 0.005 0.003 0.002 0.002 0.001 0.001 0 oooooo 0
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Rate Of Return
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.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS