tsbury Ltc. has issued a bond two years ago with a par value of Rp100 million. The maturity of the bond is 15 years, with a coupon rate of 10%. The bond can be called (callable bond) in year 10 with a premium price of 25% above par value. The risk-free rate is 5% and the investor risk premium is 3%. Tax rate is 25%. Based on the information, calculate the intrinsic value of the bond based on: (a) call

Q: Consider a bond with a principal of $1,000 that pays a coupon of $100 per year. If the bond matures…

A: Bond: It is a fixed income instrument that represents a loan made by an investor to a borrower. We…

Q: Whatever, Incorporated, has a bond outstanding with a coupon rate of 5.82 percent and semiannual…

A: The annual coupon rate is 5.82% and the payments are made semi-annually.The yield to maturity is…

Q: Aberdeen Corp. has an outstanding bond with a coupon rate of 8.5% with semi-annual payments and a…

A: Compound = Semiannually = 2Coupon rate = 8.5 / 2 = 4.25%Yield to Maturity = r = 9.20 / 2 = 4.6%Time…

Q: Company RS’s bonds outstanding have a coupon rate of 6% and semiannual payments. If the YTM  on this…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: Kasey corporation has a bond outstanding with a coupon rate of 5.96 percent and semiannual payments.…

A: Par value (FV=Future Value) =2000 Coupon payment (PMT)=5.96%*2000=119.20 Rate=5.3% Number of years…

Q: You are considering the purchase of CJ, Inc. bonds that mature in 13 years, and have a 4.75% coupon…

A: Time to maturity is 13 years Coupon rate is 4.75% Par value is $1,000 Yield to maturity is 4.45% To…

Q: Reach for the Sky, Inc., has a bond outstanding with $1,000 par value, a coupon rate of 5.96 percent…

A: To provide required return to investors, issue price should be equal to the present value of coupon…

Q: K corp. has an existing bond that has a par value of $1,000 and an 7% coupon rate. The issue pays…

A: Solution:-Value of bond means the price at which a bond should trade in the market. It is the…

Q: A bond issued by Delta Corporation matures in 12 years. It has a 12.5 percent annual coupon rate and…

A: The bond value is calculated as sum of present value of cash flows from bond

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

A: Bonds are debt instrument that offers fixed interest. The bond interest is called the coupon rate.…

Q: You are employed by an investment bank to estimate the value of a coupon-paying bond with the…

A: Solution:- Market value of the bond = Present value of coupon amounts receivable from bond at yield…

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

A: Here the bond has 10 years till maturity. Hence immediately after making first coupon payment it…

Q: Cassidy Industries' circulating bonds have a face value of $800, a semiannual coupon of 8%, 12 years…

A: Face value of bond = $ 800 Coupon rate = 8% Semi annual coupon amount = 800*0.08/2 = $ 32 Years to…

Q: Arco Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon,…

A: The question is based on the concept of Bonds valuation

Q: Suppose that you have purchased a EUR bond issued by Deutsche Bank. At the time of the purchase, the…

A: YTM stands for yield to maturity, which is the present value you can expect from your bond or debt…

Q: Whatever Incorporated, has a bond outstanding with a coupon rate of 5.56 percent and semiannual…

A: We will use the below formula to calculate the market price of the bond.Price of the bond =…

Q: Apple would like to issue a 10 year bond with $1,000 face value. The coupon rate is 5.5%, and is…

A: Yield to matutity:Yield to maturity (YTM) is a financial term used in the context of bonds and other…

Q: Show all your work. The bonds issued by XYZ CO. currently sell for $1,020. They have a 8-year…

A: Solution:-The query concerns the bonds issued by XYZ Co. These bonds are currently priced at $1,020,…

Q: A firm sells bonds with a par value of 1000 Rupees, carry a 8% coupon rate, with a maturity period…

A: a) Interest payment you receive each year = Par value * Coupon rate

Q: A firm considers to invest in two zero-coupon bonds (A and B) in order to cover for a selection of…

A: Bonds refer to the financial instruments with which periodic interest payment is attached and a…

Q: Volbeat Corporation has bonds on the market with 12.5 years to maturity, a YTM of 8 percent, and a…

A: Bond valuation is the process of determining the fair or intrinsic value of a bond, which represents…

Q: 4-year bond, with a face value of $1000, and a coupon rate of 5% (coupon is paid semi-annually), has…

A: Using Excel Rate function