The Gab corporation bonds are currently selling in the market. These bonds have 7 years left to maturity and have a coupon rate of 6.53% paid annually. If the interest rate in the market is currently 4.5%, calculate the current market price of this bond. $959.60 O $887.39 O $1,119.62 O $1,087.39 O $1147.21

The Gab corporation bonds are currently selling in the market. These bonds have 7 years left to maturity and have a coupon rate of 6.53% paid annually. If the interest rate in the market is currently 4.5%, calculate the current market price of this bond. $959.60 O $887.39 O $1,119.62 O $1,087.39 O $1147.21

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6FPE

See similar textbooks

Similar questions

Suppose we have a bond issue currently outstanding that has 25 years left to maturity. The coupon rate is 9% and coupons are paid semiannually. The bond is currently selling for $908.72 per $1000 bond. What is the cost of debt based on the bond information here? Group of answer choices A) 10% B) 5% C) 8%
Suppose an Exxon Corporation bond will pay $1,000 ten years from now. If the going interest rate on safe 10-year bonds is 7.00%, how much is the bond worth today? O a. $543.93 O b. $483.98 O c. $502.57 O d. $475.09 O e. $508.35
You are interested in purchasing a bond from ExAm Solutions. The bond had a 30 year maturity when it was issued, which was 10 years ago. Its face value was $1,000. The bond pays semi-annual interest at an 8% coupon rate. The bond currently trades at a price of $950 what is the YTM b. 0846 O C. 0428 O d. A different value e. 0876
Industrial Industries' bonds mature 5 years from today and have par value of $1,000. The bonds have a YTM of 15% and a coupon rate of 15.75%. Assuming the bonds pay interest annually, how much should these bonds sell for? $1,025.14 $902.12 $984.14 $922.63 O $1,096.90 TA
Suppose an Exxon Corporation bond will pay $1,000 ten years from now. If the going interest rate on safe 10-year bonds is 7.00%, how much is the bond worth today? O a. $483.98 b. $475.09 Oc. $508.35 Od. $502.57 O e. $543.93
Suppose a $4,500 bond will pay you $325 at the end of each quarter until the face value of the bond ($4,500) is repaid at maturity. What is the fair market value of the bond if it matures in 6 years and the market rate of return is 6.1% compounded quarterly? $9,620.42 $11,090.01 $10,991.02 $9,719.40
Suppose a Google.com bond will pay $4,000 ten years from now. If the going interest rate on safe 9-year bonds is 4.20%, how much is the bond worth today? Group of answer choices $3,066.38 $2,613.77 $2,887.56 $2,762.17 $2,660.65
Brooks Books’ bonds have 13 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 8 percent; and the yield to maturity is 7.5 percent. What is the bond’s current market price? a. $1,000.00 b. $980.72 c. $1,040.63 d. $650.07 e. $1,080.00
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?
The Saleemi Corporation's $1000 bonds pay 7 percent interest annually and have 14 years until maturity. You can purchase the bond for $1,095. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 4 percent? ___________________________________________________________________________a. The yield to maturity on the Saleemi bond is ____ %. (Round to two decimal places.)
A company is trying to issue a 15-year, BB-rated, semi-annual paying bond with 6% annual coupon rate. If the appropriate annual discount rate for the bond issuance is 3% and the current credit risk premium for BB-rated bond is 3.5%, what is the current market price of this bond? $952.55 $852.25 $1011.36 $1213.25
A ten-year bond that was issued two years ago (8 years left to maturity) has $1.000 face value with a coupon rate of 6.1% paid semiannually. The YTM is 8.1%. VWhat is the current price of the bond? O $1060.69 $883.91 O $1237.47 O $1,000.00