This is a bond question: A company issues a bond with annual coupons of $1,000 per year and the first coupon is due one year from today. It issues the bond at par, meaning that it is able to sell the bond for a price identical to its face value. If the face value is $5,000, what discount rate is used by investors to price the band?
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- 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 rate of return of the bond? What is the yield to maturity of the bond?A bond has the following features: Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: 11 years What will the holder receive when the bond matures? If the current rate of interest on comparable debt is 8 percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ Would you expect the firm to call this bond? Why? , since the bond is selling for a . If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for eleven years if the funds earn 8 percent annually and there is $90 million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar. $A bond has the following features: Coupon rate of interest: 5 percent Principal: $1,000 Term to maturity: 10 years a. What will the holder receive when the bond matures? b. If the current rate of interest on comparable debt is 8 percent, whatshould be the price of this bond? Would you expect the firm to callthis bond? Why? c. If the bond has a sinking fund that requires the firm to set aside annuallywith a trustee sufficient funds to retire the entire issue at maturity,how much must the firm remit each year for ten years if the funds earn8 percent annually and there is $100 million outstanding?
- Suppose a bond pays an annual coupon interest of $3000. Compute the yield per year that a bondholder will earn if the bond is purchased at a market value of $ 120000, $100000 and $75000. The calculations lead you to what conclusion?A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent. a) What interest payments do bondholders receive each year? b) At what price does the bond sell? c) What will happen to the bond price if the yield to maturity falls to 6 percent ?Suppose that you are interested in purchasing a bond issued by the VPI Corporation. The bond is quoted in the Wall Street Journal as selling for 89.665. How much will you pay for the bond if you purchase it at the quoted price? Assuming you hold the bond until maturity, how much will you receive at that time? If you purchase the bond at the quoted price, you would pay $. (Round to the nearest cent) Assuming you hold the bond until maturity, you would receive $ (Round to the nearest dollar)
- What is the yield to maturity on a bond that has a price of $1,700 and a coupon rate of 12% annually for 6 years at the end of which it repays the principal of $1000? Is the bond selling at premium, at par, or at discount? How can you tell? (Using financial calculator)What are the cash flows you receive from a $1,000 coupon bond with a 6% coupon rate and: a) semiannual coupon payments; b) annual coupon payments; Calculate the price of the bond if its yield to maturity is 3%. Calculate the price of the bond if its yield to maturity increases to 5%. Compare your answers and explain why the prices are different. Is the bond trade at discount, par, or premium in each case?A corporate bond is currently quoted at a price of $1197.93 and carries a 10 percent annual coupon rate. The bond’s face value is $1000, and pays coupon semiannually. What is the current yield of the bond? Suppose the bond price in one year is $1193.68, assuming no change in yield-to-maturity, what is the capital gain yield? What is the yield-to-maturity for this bond?
- A newly issued bond has a maturity of 10 years and pays a 7% coupon rate (with coupon payments coming once annually). The bond sells at par value. (i) What are the convexity and the duration of the bond? (ii) Find the actual price of the bond assuming that its yield to maturity immediately increase from 7% to 8% (with maturity still 10 years). (iii) What price would be predicted by the duration rule? What is the percentage error of that rule? (iv) What price would be predicted by the duration-with-convexity rule? What is the percentage error of that rule?A General Power bond carries a coupon rate of 8.5%, has 9 years until maturity, and sells at a yield to maturity of 7.5%. (Assume annual interest payments.) a. What interest payments do bondholders receive each year? b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What will happen to the bond price if the yield to maturity falls to 6.5%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. If the yield to maturity falls to 6.5%, will the current yield be less, or more, than the yield to maturity?I need the answer as soon as possible