Your company has bonds that mature in 12 years and have a face value of $1,000. The bonds have an 8 percent semi-annual coupon (pays $40 every six months). The bonds may be called in five years. The bonds have a YTM of 7 percent and a yield-to-call of 8.62 percent. Determine the bonds' call price. O $1,100 O $1,080 O $1,160 O $1,140 O $1,120

Your company has bonds that mature in 12 years and have a face value of $1,000. The bonds have an 8 percent semi-annual coupon (pays $40 every six months). The bonds may be called in five years. The bonds have a YTM of 7 percent and a yield-to-call of 8.62 percent. Determine the bonds' call price. O $1,100 O $1,080 O $1,160 O $1,140 O $1,120

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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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%. a. What is the yield to maturity at a current market price of 1. $8257 Round your answer to two decimal places. % 2. $1,142? Round your answer to two decimal places. b. Would you pay $825 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13%? 1. You would buy the bond as long as the yield to maturity at this price equals your required rate of return. II. You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return. III. 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. IV. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return. V. You would buy the bond as long as the yield to maturity at this price is less…
Bernard co. has 7% coupon bonds on the market that have 14 years left to maturity. The bonds will make annual payments. If the YTM on these bonds is 8%, what is the current bond price (in $ dollars)? (Assume the face value of the bond is $1,000) $
Let us assume that Hono Company has $1,000 par value bonds outstanding that have a 14 percent stated interest rate. The issue pays annual interest and it has twelve years remaining until maturity. If bonds of similar risk earn 10 percent, the firm's bond will sell for ________ today.
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Gavilon Companys bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 7.5% on these bonds. What is the bonds price?
A firm has some $1,000 par value bonds outstanding that pay a 12 percent interest rate. The bonds pay interest yearly and have 10 years until they mature. If bonds that bear similar risk currently earn 8 percent, how much will the firm's bond sell for today? A) $1,000 B) $805.20 C) $851.50 D) $1,268.20
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Johnson Motors's bonds have 10 years remaining to matu rity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon rate is 8 percent. The bonds have a yield to maturity of 9 percent. What is the current market price of these bonds? Please show the solution/ formula used for me so i'll be able to understand it clearly. Thank you
IMS corporation bonds have a coupon rate of 12% paid annually and 15 years to maturity. If the market rate of interest is 10%, the bonds should sell for: $863.78 $1,000.00 $1,152.12 $1,726.58
Bernard co. has 8% coupon bonds on the market that have 17 years left to maturity. The bonds will make annual payments. If the YTM on these bonds is 9%, what is the current bond price (in $ dollars)? (Assume the face value of the bond is $1,000)
arrimon Industries bonds have 4 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 1. $8617 Round your answer to two decimal places. % 2. $1,1417 Round your answer to two decimal places. % . Would you pay $861 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13% ? 1. You would buy the bond as long as the yield to maturity at this price equals your required rate of return. II. You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return. III. 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. IV. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return. V. You would buy the bond as long as the yield to maturity at this price is less…

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