suppose a 30 year, pay coupon of 4% is priced to yield 5%. par = 1000. the bond pays its coupon annually. calculate the instrinsic value of the bond. decide whether the bond is at premium or discount? please show the calculation using excel

Q: Find the current yield of a 9%, 30-year bond that's currently priced in the market at $1,050. Now,…

A: Instead of financial calculator Microsoft excel is used to calculations. Working note:

Q: What is the bond's coupon rate?

A: Bond Coupon Rate: It refers to the yield rate paid by the issuer to the bondholder. It is estimated…

Q: I need help with calculating and entering it into excel.

A:

Q: Consider a bond with 15 years to maturity, a coupon rate of 13% that is paid annually, a face value…

A: Face value = $1000 Coupon rate = 13% Coupon amount = 1000*0.13 = $130 Yield to maturity = 15% Years…

Q: Consider a coupon bond with a face value of $100, a coupon rate of 25%, a time-to-maturity of two…

A: Yield to Maturity: The yield to maturity (YTM) of a bond is the percentage rate of return earned by…

Q: pmts per yr 100 par term 3 coupon 6.00% current price $ 97.00 YIELD 6.00% time value discount factor…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: The face Value of a Bond is £100, the Maturity is 3 years, Yield is 5%, the Frequency of yield is…

A: P0 = Price of the bond C = Annual coupon amount i.e. £6 (£100 * 0.06) r = Yield to maturity i.e.…

Q: Consider that you have in your portfolio a 3-year 3% coupon bond with face value of $100. The…

A: The duration of a Bond : is a measurement of the average term-to-maturity of that bond. In simple…

Q: All computations must be done and shown manually

A: Given:Market interest rate (yield to maturity) = 6% per annumFace value of the bond (F) =…

Q: Using a spreadsheet, find the yield-to-maturity (YTM) on an 8-year, 6% coupon bond such that the…

A: Time = t = 8 YearsCoupon Rate = c = 6%Assuming Face Value = fv = $1000And Current price of Bond = pv…

Q: Suppose a five-year, $1,000 bond with annual coupons has a price of $897.56 and a yield to maturity…

A: The coupon rate is the interest rate paid by the issuer on a bond over the life of the instrument.…

Q: A par bond has a yield to maturity of 5.8% and pays coupons semi-annually.  What is the coupon…

A: The coupon rate are fixed payment that are done to bond holders . As these are investment for the…

Q: e.  If the bonds can be called in three years with a call premium of 4% of the face value, what is…

A: Yield to call (YTC) is a financial calculation used to estimate the total return an investor can…

Q: Consider two bonds. The first is a 6% coupon bond with six years to maturity, and a yield to…

A: The financial instruments that are of a debt nature where the issuer issues them to raise funds from…

Q: What is a discount ask yield on a bond? if the bond is priced at 1,000 and 80 days to maturity and…

A: Bonds are fixed-income assets that serve as a representation of investor loans to borrowers…

Q: Consider a 25-year bond with a face value of $1,000 that has a coupon rate of 5.9%, with semiannual…

A: A bond is a fixed income security offering a defined set of periodic payments to the investor till…

Q: The following table contains data to calculate forward rates using pure expectations theory. a) Find…

A: (1 + 10 year spot rate)10 = (1 + 2 year spot rate)2 * (1 + 8 year forward rate 2 years from now)8(1…

Q: 3. Using Excel, compute the yield-to-maturity for the following bonds (report your Excel formulas a…

A: Yield to maturity is the internal rate of return offered by the bond if the bond is held till…

Q: Assuming annual interest payments and a principal value of $100, what is the value of a 5-year 6.4%…

A: A bond is a debt security representing a loan made by an investor to a government or corporation,…

Q: Callable bond. Corso Books has just sold a callable bond. It is a thirty-year quarterly bond with an…

A: given, annual coupon rate = 5% par value = $5000 time of call = 8 years YTC = 9% coupon = par value…

Q: Find the value of a 5.9% Coupon Bond with a required return of 12.21% and 20 years to maturity. Keep…

A: PV = $534.81Explanation:Step 1:Use financial calculatorFV=1000N= 20 years (annually)PMT=1000*5.9% =…

Q: Suppose you are reviewing a sheet for a bond portfolio and see the following information. These…

A: When an investor prefers to hold a set of securities that belong to bond investment alone, then the…

Q: A) Find the price of a 5 year bond trading at a yield to maturity of 5.75% and has a coupon of 6%…

A: Bond price is the discounted value of future cash flows from the bond. This includes its coupons and…

Q: Compare the bond price risk of two bonds with an annual coupon rate of 5%, each  having distinct…

A: Bonds are debt instruments issued by companies. The issuing company borrows money from people though…

Q: compute yield-to-maturity for the following bonds

A: Yield to Maturity is the expected return to be earned on the bond when it is held till the date of…

Q: A bond with 18 years to maturity has an annual interest payment of $35. If the bond sells for its…

A: Time to maturity=18 yearsAnnual interest payment=$35 Assume the bond’s par value is to be $1000.…

Q: following table contains data to calculate forward rates using pure expectations theory. a) Find the…

A: Solved in excel using forward rate formulas

Q: Calculate the duration and convexity of a bond, 20 years to maturity bond and 6% coupon rate. Assume…

A: The duration and the convexity of the bond are measures of the sensitivity analysis of the bond. The…

Q: Calculate the duration (and price) of a bond with the following characteristics: A semi-annual…

A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…

Q: Calculate the duration (and price ) of a bond with the following

A: The current price of a bond is the price which can be paid for the purchase of the bond. It is also…

Q: The following table summarizes the prices of various default-free zero-coupon bonds (expressed as a…

A: Here,

Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…

A: Bond is a borrowing security issued by the company to raise funds from the market by making an…

Q: Assume you have a bond with a semi-annual interest payment of $50, a par value of $1 comma 000, and…

A: The current yield of a bond is a measure of the annual income the bond generates in relation to its…

Q: The following table shows the prices of a sample of Treasury strips. Each strip makes a single…

A: a) Computation of interest rate in 1-year:  Excel spread sheet:

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like: