Your company currently has 5% coupon-rate bonds (coupons are paid semi-annua with ten years to maturity and a price of $1083. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set? (Assume that for both bonds, the next coupon payment is due in exactly 6 months.) You need to set a coupon rate of two decimal places) %. (Round

Your company currently has 5% coupon-rate bonds (coupons are paid semi-annua with ten years to maturity and a price of $1083. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set? (Assume that for both bonds, the next coupon payment is due in exactly 6 months.) You need to set a coupon rate of two decimal places) %. (Round

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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Apple wants to issue bonds with $1,000 face value and 10 years to maturity. The bonds would pay coupons semi-annually. The coupon rate is 4%. The market price of the bonds is $1,070.45. What is the yield to maturity on the bonds?
Show work and formula used to get to the answer. What is the cost of new AND existing debt if the current price of the bonds is $1,050? The bonds pay a semiannual coupon of $80 ($40 every six months), mature in 12 years, and have a face value of $1,000. The floatation cost for debt is 5%. Check the number of periods per year on your calculator.
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Show work and formula used to get to the answer. What is the cost of new AND existing debt if the current price of the bonds is $1,050? The bonds pay a semiannual coupon of $80 ($40 every six months), mature in 12 years, and have a face value of $1,000. The floatation cost for debt is 5%. Check the number of periods per year on your calculator.
A company considers issuing a 5-year bond with a face value of $1,000 and annual coupon payments. The interest rate is 3% per year. If the company aims to raise $1,100 today through this bond, what should the coupon rate be? 2.15% per year 2.84% per year 3.54% per year 5.18% per yea
Subject :- Finance
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%. What is the yield to maturity at a current market price of $834? Round your answer to two decimal places. % $1,091? Round your answer to two decimal places. % Would you pay $834 for each bond if you thought that a "fair" market interest rate for such bonds was 13%—that is, if rd = 13%? You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return. You would buy the bond as long as the yield to maturity at this price is less than your required rate of return. You would buy the bond as long as the yield to maturity at this price equals your required rate of return. You would not buy the bond as long as the yield to maturity at this price is greater than your…
You will receive $100 from a savings bond in 4 years. The nominal interest rate is 7.90 %. a) What is the present value of the proceeds from the bond? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b) If the inflation rate over the next few years is expected to be 2.90%, what will the real value of the $100 payoff be in terms of today's dollars? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c)What is the real interest rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. d)Calculate the real payoff from the bond [from part (b)] discounted at the real interest rate [ from part (c)]. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Berk Bhd issues bonds that pay interest semi-annually and have maturities of 1 year and 30 years. The bonds have a face value of RM1,000 and an annual coupon rate of 10 percent. i) If investors have demanded an interest rate of 5 percent on the bond investment, what is the maximum prices to pay for the 1-year bond and 30-year bond? ii) Suppose that the interest rate has increased to 20%, calculate the values of the 1-year bond and 30-year bond.
Find the effective rate of the compound interest rate or investment. (Round your answer to two decimal places.) A $80,000 zero-coupon bond maturing in 8 years and selling now for $44,035
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $ 1,000 par value and a coupon rate of 8%. What is the yield to maturity at a current market price of $812? Round your answer to two decimal places. % $1,097? Round your answer to two decimal places. %
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