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Marco Bond is a billionaire who wants to invest some of its petty cash in corporate bonds. You, as the hired financial planner of Marco, suggested the following bonds who all have a yield to maturity of 10% and matures in 15 years: ·       PCOR – 8% annual coupon rate; P1,000 face value ·       PGOLD – 10% annual coupon rate; P1,000 face value ·       PSE – 12% annual coupon rate; P1,000 face value 1. On the issuance date, PCOR bond issued at? 2. How much will Marco Bond pay if he will invest in PCOR bond today? a. 847.88 b. 852.66 c. 1,000.00 d. 1,152.12 3. Determine the Current Yield of PCOR. a. 9.44% b. 10.00% c. 10.42% d. 11.23%

Marco Bond is a billionaire who wants to invest some of its petty cash in corporate bonds. You, as the hired financial planner of Marco, suggested the following bonds who all have a yield to maturity of 10% and matures in 15 years: ·       PCOR – 8% annual coupon rate; P1,000 face value ·       PGOLD – 10% annual coupon rate; P1,000 face value ·       PSE – 12% annual coupon rate; P1,000 face value 1. On the issuance date, PCOR bond issued at? 2. How much will Marco Bond pay if he will invest in PCOR bond today? a. 847.88 b. 852.66 c. 1,000.00 d. 1,152.12 3. Determine the Current Yield of PCOR. a. 9.44% b. 10.00% c. 10.42% d. 11.23%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 9P
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Marco Bond is a billionaire who wants to invest some of its petty cash in corporate bonds. You, as the hired financial planner of Marco, suggested the following bonds who all have a yield to maturity of 10% and matures in 15 years:

·       PCOR – 8% annual coupon rate; P1,000 face value

·       PGOLD – 10% annual coupon rate; P1,000 face value

·       PSE – 12% annual coupon rate; P1,000 face value

1. On the issuance date, PCOR bond issued at?

2. How much will Marco Bond pay if he will invest in PCOR bond today?

a. 847.88
b. 852.66
c. 1,000.00
d. 1,152.12

3. Determine the Current Yield of PCOR.

a. 9.44%
b. 10.00%
c. 10.42%
d. 11.23%

4. If Marco Bond is interested in the periodic income from the bonds, between PCOR and PGOLD which is better?

a. PCOR because it has a greater current yield than PGOLD
b. PCOR because it has a lesser current yield than PGOLD
c. PGOLD because it has a higher current yield than PCOR
d. Indifferent since both of them has the same yield to maturity rate

 

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