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

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 9P: Bond Valuation and Interest Rate Risk The Garraty Company has two bond issues outstanding. Both...
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS