Your company has bondsthat mature in 12 years andhave a face value of $1,000.The bonds have an 8 percentsemi-annual coupon (pays $40 every six months). Thebe called in fivebonds mayyears. The bonds have aYTM of 7 percent and ayield-to-call of 7.71 percent.Determine the bonds' callprice. $1,100 $1,140 $1,080 $1,120 $1,160

First of all we have to calculate the Bonds's current price by using the excel formula ''=PV''Then…

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 7.71 percent. Determine the bonds' call price. $1,100 $1,140 $1,080 $ 1,120 $1,160

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 7.71 percent. Determine the bonds' call price. $1,100 $1,140 $1,080 $ 1,120 $1,160

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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Similar questions

Smithson Co.'s Class A bonds have 10 years to go until maturity. They have a $1,000 face value and carry coupon rates of 8%. Approximately what do the bonds yield at the following prices? Assume bond coupons are paid semiannually. a. $770. b. $875. c. $1,000.
Assume that Beach Inc. has an issue of 20-year $1,000 par value bonds that pay 7% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would these bonds sell for today?
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 15-year bond with a coupon of Sx payable every 6 months has a face (and redemption) value of $10,000. At the nominal annual interest rate of 6.5% convertible semi-annually, the price of the bond is $9,000. Compute X.
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
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
Cold Boxes Ltd. issued one hundred $1,000 face value bonds. This bond's current market value of $541.20 will give a YTM of 12%. Interest payments are made every six months. The bonds mature in 10 years. What is the coupon rate of these bonds? 7% 5% 6% 4%
Brooks Books’ bonds have 13 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 8 percent; and the yield to maturity is 7.5 percent. What is the bond’s current market price? a. $1,000.00 b. $980.72 c. $1,040.63 d. $650.07 e. $1,080.00
You have a chance to buy a corporate bond. Here are the details: Years until maturity = 10 Annual interest income = $100/year (assume end of the year) Par value paid to you when the bond matures in 10 years = $1,000 Assume the interest is paid yearly. Market rates are currently 12% and coupon rate is 10% What is this bond's value? Group of answer choices $228.91 $ 886.99 $1,132.97 $100.00

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