Omega Corporation plans to issue $200 million of bonds, and wants these bonds to sell for their $ 1,000 par value. Omega also has existing bonds maturing on March 12, 2037, paying a 6.80% semi- annual coupon, and trading for $1,026.86 in the financial market. What should the coupon interest rate be on these new bonds to ensure Omega receives the $1,000 par value? Group of answer choices 6.93% 6.80% 3.25 % 6.49 % 3.47%
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- Suppose Lion Cage Multinational floated 5000 bonds on January 1, 2020 with a par value of 1500 at stated rate of 16%. Currently, the market is selling these bonds at 18%. The bonds are expected to paid back by December 2030 with an interest paid quarterly effective March 1, 2020. What would be the bond price? Group of answer choices A. 6,870,050 B. No choice given C. 7,584,000 D. 7,485,006 E. 6,708,900Suppose Lion Cage Multinational floated 5000 bonds on January 1, 2020 with a par value of 1500 at stated rate of 16%. Currently, the market is selling these bonds at 18%. The bonds are expected to paid back by December 2030 with an interest paid quarterly effective March 1, 2020. What would be the bond price? Group of answer choices No choice given 7,485,006 6,708,900 7,584,000 6,870,050S Uliana Company wants to issue new 19-year bonds for some much-needed expansion projects. The company currently has 10.3 percent coupon bonds on the market that sell for $1,143, make semiannual payments, have a par value of $1,000, and mature in 19 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct. Coupon rate 9.48 X %
- The following tutorial questions serve as practice questions on TVM and Bond Valuation. (Answer Both Questions 1 & 2) The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon. The 6 percent annual coupon bonds matures in 2035, and it is now 2020. Interest on these bonds is paid annually on December 31 of each year, and new annual coupon bonds with similar risk and maturity are currently yielding 10 percent. How much should Karen sell her bonds today? What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 119% with coupons rate of 10%? Assume the par value of the bond is $1,000.Chamberlain Company wants to issue new 17-year bonds for some much-needed expansion projects. The company currently has 10.2 percent coupon bonds on the market that sell for $883.72, make semiannual payments, and mature in 17 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000. Multiple Choice 12.10% O 11.70% O 11.50% O 5.90% O 11.80%Create an essay using the following information: Assume you are evaluating whether to purchase the following $1,000 face value bonds: Co. X bond with a 6% coupon rate that matures in 9 years. Co. Y bond with an 11% coupon rate that matures in 7 years. Also, you may wish to review https://t.ly/wJqNM and https://t.ly/2EX2k about corporate junk (junk bonds). Given the scenario and information about junk bonds, address the following: Value these bonds assuming a market rate on similar risk bonds is 7% and interest is paid annually. Value these bonds assuming a market rate on similar risk bonds is 7% and interest is paid semi-annually. Value these bonds assuming a market rate on similar risk bonds is 12% and interest is paid annually. Assuming both bonds were issued at the same time, why would the Co. Y bond pay a higher coupon rate?
- BDJ Co. wants to issue new 18-year bonds for some much-needed expansion projects. The company currently has 8.9 percent coupon bonds on the market that sell for $1,129, make semiannual payments, have a par value of $1,000, and mature in 18 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Estimated $ Volume Company (Ticker) Coupon Xenon, Incorporated (XIC) Kenny Corporation (KCC) 6.500 Williams Company (WICO) 7.230 ?? Maturity January 15, 2045 January 15, 2039 January 15, 2041 Last Price Last Yield 94.315 ?? (000s) ?? 57,373 6.24 48,952 94.845 7.06 43,813 What is the coupon rate for the Williams Company bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Coupon rate %To calculate the number of years until maturity, assume that it is currently January 15, 2022. All of the bonds have a $2,000 par value and pay semiannual coupons. Estimated $ Volume Company (Ticker). Coupon Xenon, Incorporated (XIC) 5.400 Maturity January 15, 2034 Kenny Corporation (KCC) 4.125 Williams Company (WICO) ??? January 15, 2029 January 15, 2031 Last Price 92.685 ?? Last Yield (000s) PP 57,362 3.84 48,941 104.310 4.12 43,802 a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the bond's current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Price b. Current yield %
- 4. On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on December 31, 2022. The bond has a coupon rate of 10% and a required rate of return of 12%. What is the value of the investment on January 1, 2020?Use the following corporate bond quotes to answer Questions 31-33: To calculate the number of years until maturity, assume that it is currently January 15, 2022. All of the bonds have a $2,000 par value and pay semiannual coupons. Company (Ticker) Xenon, Inc. (XIC) Kenny Corp. (KCC) Williams Co. (WICO) LO2 31. LO2 32. Coupon Maturity 5.400 Jan 15, 2034 4.125 Last Price 92.685 Jan 15, 2029 ?? Jan 15, 2031 104.310 ?? Last Yield ?? 3.84 4.12 Bond Yields What is the yield to maturity for the bond issued by Xenon, Inc.? Bond Prices What price would you expect to pay for the Kenny Corp. bond? What is the bond's current yield? Est $ Vol (000s) 57,362 48,941 43,802 Page 207Coronel Corporation wants to issue new 20-year bonds. The company currently has 8.5 percent bonds on the market that sell for $994, make semiannual payments, and mature in seven years. What should the coupon rate be on the new bonds if the firm wants to sell them at par? A. 8.87% B. 8.75% C. 8.62%
