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What is the maximum price of an 8% coupon, 15 year Corporate bond could theoretically sell for, assuming $1,000 par value.
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- What price would you pay for a 10-year, AA bond with a Face Value of $1,000 and a coupon rate of 7.10%?Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?A 100-year corporate bond has a coupon rate of 5% with semi - annual payments. If the current value of the bond in the marketplace is $400, then what is the Yield - to - Maturity (YTM)?
- Suppose that you purchased a Baa rated $ 1000 annual coupon bond with a 5% coupon rate and a 7-year maturity at par value. If you sold the bond two years later, and the yield on comparable debt 7.666 %, what would your capital gain (+)/loss(-) be? (Enter dollars and cents. )How is a bond’s value determined? What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required return is 10%?Calculate the market conversion price for a convertible bond with par value of $4000, coupon rate of 5%, market price of $4000, a conversion ratio of 16, and current stock price of $202. 1. Assuming, the issuing company pays an annual dividend of $12 per share, what is the favorable income differential (yield advantage) per share for this bond? 2. Calculate the premium payback period for this bond.
- What is a fair purchase price for a zero-coupon bond with 14 years to maturity, a face value of $9,000, and a yield - to- maturity of 9.48% ? (Answer to the nearest $0.01)Your company wants to raise $8.0 million by issuing 30-year zero-coupon bonds. If the yield to maturity on the bonds will be 5% (annual compounded APR), what total face value amount of bonds must you issue?A treasury bond with $100 maturity face value has a $9 annual coupon, and 15 years left to maturity. What price will the bond sell for assuming that the 15 year yield to maturity in the market is 4%, 9%, and 14% respectively. Explain whether the price movements would have been greater or smaller if a 10 year bond had been used rather than a 15 year one.
- Assume that all participants in the following have an interest rate or discount rate of 10%. A firm could either finance an operation by selling 1% of a constant stream of income of $50 million per year forever (an equity exchange) or by selling a 5 year bond with a 15% coupon rate and a face value of $3 million.a. What is the present value of the equity?b. What is the present value of the bond?If a $5,000 zero coupon bond with a 10-year maturity has a market price of $1,508.30, what is its rate of return?What is the duration of a five-year, $1,000 Treasury bond with a 10 percent semiannual coupon selling at par? Selling with a yield to maturity of 12 percent? 14 percent? What can you conclude about the relationship between duration and yield to maturity? Plot the relationship. Why does this relationship exist?
