You are interested in buying one corporate bond and your broker has offered two corporate bonds for you to consider: 1. Bond A: paying quarterly coupons, with a maturity date of 1 January 2025, an annual coupon rate of 12% and a bond flat price of $90.0 2. Bond B: paying quarterly coupons, with a maturity date of 1 January 2035, an annual coupon rate of 15% and a bond flat price of $100.0 If the settlement date of both bonds is 1 January 2022, which of these two bonds represents the best investment opportunity? nd A

You are interested in buying one corporate bond and your broker has offered two corporate bonds for you to consider: 1. Bond A: paying quarterly coupons, with a maturity date of 1 January 2025, an annual coupon rate of 12% and a bond flat price of $90.0 2. Bond B: paying quarterly coupons, with a maturity date of 1 January 2035, an annual coupon rate of 15% and a bond flat price of $100.0 If the settlement date of both bonds is 1 January 2022, which of these two bonds represents the best investment opportunity? nd A

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Estimated $ Volume Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Coupon 5.700 Williams Company (WICO) 7.150 ?? Maturity January 15, 2037 January 15, 2031 Last Price Last Yield 94.219 ?? (000s) ?? 57,365 6.08 48,944 January 15, 2033 94.765. 6.90 43,805 a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the bond's current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Price b. Current yield $ 2,088 87 6.85%
Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 1.8% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j2 = 11.9% p.a. Assume that this corporate bond has a 5% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to three decimal places. O a. O b. $79.790 O c. $61.241 O d. $55.718 a. $78.509
If you were to purchase a 12% bond when the market interest rate for such bonds was 11%, would you expect to pay more or less than the face amount for the bond? If you were to purchase a 12% bond when the market interest rate for such bonds was 13%, would you expect to pay more or less than the face amount for the bond? Explain your answers from above?
Consider a bond with an equity warrant. The warrant entitles the bondholder to buy 25 shares of the issuer at €50 per share for the lifetime of the bond. The bond is a 30-year zero coupon bond with a €1,000 par value that has a yield to maturity of i € = 6 percent. The price of the bond is €600. What is the value of the warrant? €174.11 €425.89 €231.38 none of the options
You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Williams Company (WICO) Coupon rate Coupon 7.000 7.280 ?? % Maturity January 15, 2041 January 15, 2035 January 15, 2037 Last Price Last Yield 94.375 ?? 94.895 ?? 6.34 7.16 Estimated $ Volume (000s) 57,378 What is the coupon rate for the Williams Company bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 48,957 43,818
you are interested in a corporate bond with a current market price of $973.36 and yield to a maturity of 7%. the bond carries a coupon rate of 6%, paid semi annually. if you buy the bond today, how many semi- annual coupon payments will you receive until the final maturity?
On January 31, 2022 you purchased a newly issued 5.6% coupon bond issued by the Dana Corporation for $1,023.56. The bond is noncallable and matures January 31, 2048. You decide to sell the bond April 30, 2023 when the bond’s yield to maturity was 4.82 percent. Based on a 30/360 day-count method, how much will you receive from the sale of the bond (including accrued interest)? Consider the December 31, 2022 and 2021 balance sheet for the Jasper Company and the income statement for the year ended December 31, 2022: JASPER COMPANY Balance Sheets as of December 31, 2022 and 2021 Assets 2022 2021 Cash $ 405 $310 Accounts receivable 3,055 2,640 Inventory 3,850 3,275 Property, plant, and equipment (net) 10,670 10,960 Total $17,980 $17,185 Liabilities and Stockholder’s Equity 2022 2021 Accounts payable $ 2,570 $ 2,720 Current portion of long-term debt payable 0 100…
The Chief Financial Officer of a company would like to raise money for new equipment by floating a new bond issue. The CFO would like to receive $1000 (full face value) for each of the bonds she sells. After collecting the below bond market data, and if the bonds carry a rating of A and have a term of 10 years, what coupon rate should be included in the bond contract? Assume an annual coupon payment. Security& Rating Maturity Face Coupon Price Treasury 1 $ 1,000 0.00% $ 965.00 Treasury 3 $ 1,000 1.90% $ 939.06 Treasury 5 $ 1,000 4.30% $ 932.42 Treasury 10 $ 1,000 6.80% $ 1,007.12 Treasury 15 $ 1,000 6.60% $ 908.25 CorpA A 5 $ 1,000 8.10% $ 990.00 CorpB BB 10 $ 1,000 7.90% $ 859.88 CorpC AA 15 $ 1,000 7.00% $ 660.00

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