Potter Industries has a bond issue outstanding with a 6% coupon rate with semiannual payments of $30, and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 8%, what is the value of the bond?
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A: Par value of bond = 1000 Coupon rate = 6% Coupon amount = 1000 * 6% = 60
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A: Using financial caluclator, N (No. of compounding periods) = 15*2 =30 PV (Price of bond) = -1100 FV…
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A: Par value = $ 1000 Coupon rate = x Coupon amount (C) = 1000*X= 1000X Price (PV) = $ 1108.60 Yield…
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A: Computation:
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A: Computation:
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A: Time Period = % years Coupon Rate = 6% YTM = 7% Par Value = $1,000
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A: a) Bond's Coupon Rate = Annual Coupon / Face Value
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A: It is the discounted value of future cash stream generated by a bond. It is the sum of present value…
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A: Face Value = 1,000 Time to maturity = 11 years Coupon = Coupon Rate * Face Value = 10%*1000 = $100…
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- Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?A bond has 10 years until maturity, a coupon rate of 9%, and sells for $1,100. Interest is paid annually. (Assume a face value of $1,000.) If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. If the inflation rate during the year is 3%, what is the real rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.A bond offers a coupon rate of 4%, paid annually, and has a maturity of 6 years. The current market yield is 13%. Face value is $1,000. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond?
- Ba Corp is issuing a 10 year bond with a coupon rate 8%. The interest rate for similar bonds is currently 6%. Assuming annual payments, what is the value of the bond?A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. a) If the bond has a yeild to maturity of 9% 1 year from now, what will its price be at that time? b) What will be the rate of return on the bond? c) Now assume that interest is paid semannually. What will be the rate of return on the bond? d) If the inflation rate during the year is 3% what is the real rate of return on the bond?A bond has 10 years until maturity, a coupon rate of 8.1%, and sells for $1,190. Interest is paid annually. (Assume a face value of $1,000.) a. If the bond has a yield to maturity of 9.9% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. Round your answer to nearest whole number. Price b. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. Rate of return % c. If the inflation rate during the year is 3%, what is the real rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. Real rate of return %
- Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 6.5%, payable annually, and a par value of $1,000. The 1-year interest rate is 6.5%. Next year, there is a 35% probability that interest rates will increase to 8% and a 65% probability that they will fall to 5%. What will the market value of these bonds be if they are noncallable?A bond has 10 years until maturity, a coupon rate of 8.4%, and sells for $1,160. Interest is paid annually. (Assume a face value of $1,000.) If the bond has a yield to maturity of 9.6% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. Round your answer to nearest whole number. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. If the inflation rate during the year is 3%, what is the real rateCarries Clothes, Inc. has a five -year bond outstanding that pays $60 annually. The face value of each bond is $1,000, and the bond sells for $890. Use semi- annual interest payments if it applies. What is the bond’s coupon rate? What is the current yield? What is the yield to maturity?
- Graystone bonds have a maturity value of $1,000. The bonds carry a coupon rate of 12%. Interest is paid semiannually. The bonds will mature in 9 years. If the current market price is $976.50, What is the yield to maturity on the bond? b. What is the current yield on the bond? а.Enterprise, Inc. bonds have a 9 percent annual coupon rate. The interest is paid semiannually and the bond mature in eight years. Their par value is $1,000. If the market’s required yield to maturity on a comparable-risk bond is 8 percent, what is the value of the bond? What is its value if the interest is paid annually? How to calculate this using mathematical calculation with formulas in finance?Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of 1000, and a coupon rate of 7.8% (annual payments). The yield to maturity on this bond when it was issued was 6.2%. Assuming the yield to maturity remains constant, what is the price of the bond immediately after it makes its first coupon payment? After the first coupon payment, the price of the bond will be $_____ (Round to the nearest cent.)