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- * Assignment 3 i Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (%) 248 a. What is the yield to maturity of each bond? b. What is the duration of each bond? Price (%) 80.36 96.95 135.22 Complete this question by entering your answers in the tabs below. Required A Bond Coupon (%) 2 4 8 Required B What is the yield to maturity of each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. YTM % % % Saved 22255 35445Question 2 a. A bond that matures in one year has a $500 face value and a $60 coupon. What is the price of the bond if the interest rate is 6 percent and the bond was purchased by the present owner for $450? b. A bond that matures in two years has a face value equal to F and a coupon equal to R. Suppose that the yield to maturity, i, is such that i = ( R / F ). The price of the bond equals... F F/(1+i) F(1+i) F/i Answer both otherwise don't do that I will DounvoteProblem 2 - Reading bond tables Consider the following information from the Treasury bond table: Maturity Coupon Bid Asked 7/15/2021 2.1% 100.1600 100.2480 Asked Yield 1.3% a. What is the asked price of the bond that matures on 7/15/2021 and has a face value of $500? b. What is its coupon and current yield? c. What its the yield to maturity?
- Question 2 a) What are the main characteristics of a bond? Provide examples of different types of bonds in terms of coupons and maturity. b) Explain the difference between "coupon rate" and "yield to maturity", Show, using examples, how changes in the coupon rate and yield to maturity affects the bond price. c) You are asked to put a value on a bond which promises eight annual coupon payments of £50 and will repay its face value of £1000 at the end of eight years. You observe that other similar bonds have yields to maturity of 9 per cent. i) i) How much is this bond worth? (" You are offered the bond for a price of £755.5. What yield to maturity does this represent? d. You believe that next year XYZ plc will pay a dividend of £2 on its common stock Thereafter you expect dividends to grow at a rate of 4% a year in perpetuity. If you require a return of 12% on your investment. i. How much should you be prepared to pay for the stock? ii. Assuming that the expected stock price at the end…Question 4 A bond with a P600, 000 face value has a 7% coupon and a five-year maturity, Find the total of the interest payments paid to the bondholder.6. Yield to Maturity Each of the bonds shown below pays interest annually. Bond Par Value Coupon Years to Maturity Current Value A 12% 15 B 10% 10 C $1000 13% 10 D $1000 8% 4 a) Calculate the yield to maturity (YTM) for each bond. $1000 $500 $850 $560 $1200 $900 b) What relationship exists between the coupon rate and yield to maturity and the par value and market value of a bond? Explain.
- Question 5 A Treasury bond is quoted at a price of 103.949. What is the market price of this bond (in S) if the face value is $5,000 ? not round any intermediate calculations. Round your final answer to 2 decimal places and enter it in the box belotQUESTION 2 Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the yield to maturity of the bond? A. 30% B. 0% C. 35.4% D. 100.2%QUESTION 3 Consider a 6.5%-coupon (semi-annual) bond with 9 years until maturity. If the price of the bond is $139.90, what is the yield-to-maturity of the bond? State your answer as a percentage; e.g. if the answer is 5.00%, write 5.00 rather than 0500. QUESTION 4 What is the yield-to-maturity of a 7-year, 5%-coupon bond with a price of $93.00? Assume the bond has a par value of $100 and pays coupons semi-annually. State your answer as a percentage; e.g. if the answer is 5.00%, write 5.00 rather than .0500.
- K Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): 0 2 5 Period $19.53 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? Cash Flows View an example Get more help. ★ a. What is the maturity of the bond (in years)? The maturity is years. (Round to the nearest integer.) A 6 1 MacBook Pro & 7 $19.53 * 8 9 C 59 $19.53 60 $19.53+$1,000 Clear all BUB 0 {QUESTION ONE What are the main characteristics of a bond? Provide examples of different types of bonds in terms of coupons and maturity. Explain the difference between coupon rate and yield to maturity. Show, using examples, how changes in the coupon rate and yield to maturity affects the bond price. You are asked to put value on a bond which promises 8 annual coupon payments of £50 and will repay its face value of £1000 at the end of 8 years. You observe that other similar bonds have yields to maturity of 9%. How much is this bond worth? You are offered the bond for a price of £755.5, what yield to maturity does this represent? You believe that next year XYZ plc will pay a dividend of £2 on its common stock. Thereafter, you expect dividends to grow at a rate of 4% a year in perpetuity. If you require a return of 12% on your investment. How much should you be prepared to pay for the stock? Assuming that the expected stock price at the end of year 5 is £37.6, calculate the return on…Question 2A. A bond has a face value of $2000, a coupon rate of 6% and matures in 10years’ time. If its current yield to maturity is 8% what is the current price ofthe bond? If the yield falls to 4% determine the bond price. What do theseresults indicate about the relationship between the price of a bond and itsyield to maturity? B. You are asked to put a value on a bond which promises eight annual couponpayments of £70 and will repay its face value of £1000 at the end of eightyears. You observe that other similar bonds have yields to maturity of 9 percent. How much is this bond worth? You are offered the bond for a priceof £1030.44. What yield to maturity does this represent? C. Explain in detail the trade-off model of capital structure. In light of the currentglobal financial challenge, discuss which elements of the model areexpected to become most prevalent?