On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on December 31, 2022. The bond has a coupon rate of 10% and a required rate of return of 12%. What is the value of the investment on January 1, 2020?
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4. On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on December 31, 2022. The bond has a coupon rate of 10% and a required rate of return of 12%. What is the value of the investment on January 1, 2020?
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- David Palmer identified the following bonds for investment: Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025. 2) 1) Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031. Bond C: A S1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026. 3) The three bonds were issued on July 1, 2011. (a) If Bond B is issued at face value and both Bond B and Bond A are having the same yield to maturity (EAR) at issuance, calculate the market price of Bond A on July 1, 2011. [Note: Full mark would only be given to correct answer of which the values of those variables not provided in the question directly are derived.] (b) David Palmer purchased Bond C on January 1, 2014 when Bond C was priced to have a yield to maturity (EAR) of 10.3812891%. David subsequently sold Bond C on…Q1. A firm has just issued (January 1, 2019) a bond that has a face value of $1,000, a coupon rate of 6 percent paid semi-annually (June 30, December 31), and matures in 8 years. The bonds were issued with a yield to maturity of 7%. What price were the bonds issued at? Assume that on July 1, 2021, the bond trades to earn an effective yield of 10%. At what price should this bond be trading for on July 1, 2021? PRICE WHEN ISSUED: PRICE ON JULY 1, 2021:David Palmer identified the following bonds for investment: Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025. Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031. Bond C: A $1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026. The three bonds were issued on July 1, 2011. If Bond B is issued at face value and both Bond B and Bond A are having the same yield to maturity (EAR) at issuance, calculate the market price of Bond A on July 1, 2011. David Palmer purchased Bond C on January 1, 2014 when Bond C was priced to have a yield to maturity (EAR) of 10.3812891%. David subsequently sold Bond C on January 1, 2016 when it was priced to have a yield to maturity (EAR) of 12.550881%. Assume all interests received were reinvested to earn a rate of return of…
- David Palmer identified the following bonds for investment:Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025. Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031.Bond C: A $1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026.The three bonds were issued on July 1, 2011.If Bond B is issued at face value and both Bond B and Bond A are having the same yield to maturity (EAR) at issuance, calculate the market price of Bond A on July 1, 2011.[Note: Full mark would only be given to correct answer of which the values of those variables not provided in the question directly are derived.] David Palmer purchased Bond C on January 1, 2014 when Bond C was priced to have a yield to maturity (EAR) of 10.3812891%. David subsequently sold Bond C on January 1, 2016 when it…David Palmer identified the following bonds for investment: Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025. Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031. Bond C: A $1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026. The three bonds were issued on July 1, 2011. David Palmer purchased Bond C on January 1, 2014 when Bond C was priced to have a yield to maturity (EAR) of 10.3812891%. David subsequently sold Bond C on January 1, 2016 when it was priced to have a yield to maturity (EAR) of 12.550881%. Assume all interests received were reinvested to earn a rate of return of 3% per quarter (in another investment account). Calculate: i) the current yield, ii) the 2-year capital gains yield and iii) the 2-year total rate of return on investment…David Palmer identified the following bonds for investment: Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025. Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031. Bond C: A $1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026. The three bonds were issued on July 1, 2011. If Bond B is issued at face value and both Bond B and Bond A are having the same yield to maturity (EAR) at issuance, calculate the market price of Bond A on July 1, 2011. [Can I have the equation please]
- David Palmer identified the following bonds for investment: BondA: A$1millionpar,10%annualcouponbond,whichwillmature on July 1, 2025. Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031. Bond C: A $1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026. The three bonds were issued on July 1, 2011. (a) If Bond B is issued at face value and both Bond B and Bond A are having the same yield to maturity (EAR), calculate the market price of Bond A on July 1, 2011. [N ote: Full mark would only be given to correct answer of which the values of those variables not provided in the question directly are derived.] (b) David purchased the Bond C on January 1, 2014 when Bond C was priced to have a yield to maturity (EAR) of 10.3812891%. David subsequently sold Bond C on January 1, 2016…On 1st January 2019, Indus Motors floated multiple bonds with a face value of Rs. 1,000 each to generate Rs. One billion for its “Yaris” car manufacturing division. Maturity of bond is 5 years, while interest rate on coupon is 8% per annum. What will be the bond value if market interest rate is 5% and 12% respectively?From the above, at what rate bond will be sell at “Premium” and “Discount”CCI Inc. has a 9.85% bond that mature on March 15, 2034. Assume that the interest on these bonds is paid quarterly. With a face value of $1,000, what would the bond price be as of March 15, 2024 to an investor who holds the bond until maturity and requires an 10.25% rate of return?
- 2. A firm has just issued (January 1, 2018) a bond that has a face value of $1,000, a coupon rate of 7 percent paid semi-annually (June 30, December 31), and matures in 10 years. The bonds were issued with a yield to maturity of 6%. What price were the bonds issued at? Assume that on July 1, 2020, the bond trades to earn an effective yield of 9%. At what price should this bond be trading for on July 1, 2020? PRICE WHEN ISSUED: PRICE ON JULY 1, 2020: 3. A Canadian company has a division in Mexico. The Canadian company needs to borrow money for its Mexican division and has the choice of borrowing in Mexico or Canada. The effective annual interest rate in Canada is 6 percent and the interest rate in Mexico is 10 percent. The current exchange rate is 15 Mexican pesos per Canadian dollar. If you believe that the Canadian dollar will depreciate 10 percent against the Mexican peso over the next 6 months, where should the company borrow? For simplicity, assume that the company wants to borrow…1. 8990 Holdings, Inc. issued a bond on July 16, 2016 that matures in October 16, 2020. This means that the term of the bond is 5 years. Coupon payments will be made every quarter with a rate of 6.21% per annum. Assume that the face value is P10,000 and investor have required rate of return of 10%. The coupon payment per quarter would be? a. P621.00 b. P155.25 c. P310.50 d. P250.00 2. Using information in #1, the price for each unit of bond would be closest to? a. P10,000 b. P16,102.49 c. P8,522.93 d. P10,943.141. 8990 Holdings, Inc. issued a bond on July 16, 2016 that matures in October 16, 2020. This means that the term of the bond is 5 years. Coupon payments will be made every quarter with a rate of 6.21% per annum. Assume that the face value is P10,000 and investor have required rate of return of 10%. The coupon payment per quarter would be? a. P621.00 b. P155.25 c. P310.50 d. P250.00