The 10 percent annual coupon bonds of the Manitoba Co. are selling for $1,346.53. The bonds have a face value of $1,000 and mature in 15 years. What is the yield to maturity? Multiple choice question. 10.00% 8.26% 3.19% 6.35%
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The 10 percent annual coupon bonds of the Manitoba Co. are selling for $1,346.53. The bonds have a face value of $1,000 and mature in 15 years. What is the yield to maturity?
10.00%
8.26%
3.19%
6.35%
Step by step
Solved in 2 steps
- Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?Bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds?Current Yield for Annual Payments Heath Food Corporations bonds have 7 years remaining to maturity. The bonds have a face value of 1,000 and a yield to maturity of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield?
- Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has a face value of $1,000 and a yield to maturity of 10.5883%. The bond pays coupons semiannually. What is the bond’s current yield?Fingen's 16-year, $1,000 par value bonds pay 11 percent interest annually. The market price of the bonds is $930 and the market's required yield to maturity on a comparable-risk bond is 14 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? Question content area bottom Part 1 a. What is your yield to maturity on the Fingen bonds given the market price of the bonds?
- A firm’s bonds have a maturity of 26 years with a $1,000 face value, a 9 percent semiannual coupon, are callable in 5 years at $1,080, and currently sell at a price of $1,163. What is their yield to call (YTC)? a. 9.00% b. 7.56% c. 6.51% d. 5.25% e. 7.65%Calculate the yield to maturity for a bond that has a $1,000 per value, 15 years to maturity, a 4% annual coupon, and currently sells for $990. Assume the bond is callable 2 years from today at a call price of $1,040. A. 4.09% B. 4.29% C. 4.53% D. 6.49%Fingen's 18-year, $1,000 par value bonds pay 13 percent interest annually. The market price of the bonds is $1,140 and the market's required yield to maturity on a comparable-risk bond is 10 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? Question content area bottom Part 1 a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? enter your response here%
- Suppose a 19-year, 11% coupon bond selling for $1,233.64 is first callable in 6 years at $1,055. Coupons are paid twice a year and par value is $1000. What is the annual yield to first call date? A. 6.1% B. 7.1% C. 6.5% D. 5.7%A firm’s bonds have a maturity of 18 years with a $1,000 face value, a 13 percent semiannual coupon, are callable in 4 years at $1,055, and currently sell at a price of $1,156. What is their yield to maturity (YTM)? a. 8.33% b. 9.40% c. 13.00% d. 10.99% e. 11.08%A $100, 4.5% bond with semiannual coupons will be redeemed at the end of 15 years. Find the price to yield (a) 3%; (b) 4.5%; (c) 5.5%
