Question

Issue Price The following terms relate to independent bond issues: 430 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 430 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 810 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,110 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar. Situation Selling Price of the Bond Issue a. $ 130,403 b. $ 810,000

Answer #1

Issue Price
The following terms relate to independent bond issues:
570 bonds; $1,000 face value; 8% stated rate; 5 years; annual
interest payments
570 bonds; $1,000 face value; 8% stated rate; 5 years;
semiannual interest payments
860 bonds; $1,000 face value; 8% stated rate; 10 years;
semiannual interest payments
1,990 bonds; $500 face value; 12% stated rate; 15 years;
semiannual interest payments
Use the appropriate present value table:
PV of $1 and PV of Annuity of $1
Required:
Assuming the...

Issue Price
The following terms relate to independent bond issues:
650 bonds; $1,000 face value; 8% stated rate; 5 years; annual
interest payments
650 bonds; $1,000 face value; 8% stated rate; 5 years;
semiannual interest payments
870 bonds; $1,000 face value; 8% stated rate; 10 years;
semiannual interest payments
2,020 bonds; $500 face value; 12% stated rate; 15 years;
semiannual interest payments
Use the appropriate present value table:
PV of $1 and PV of Annuity of $1
Required:
Assuming the...

ssue Price
The following terms
relate to independent bond issues:
460 bonds; $1,000 face value; 8% stated rate; 5 years; annual
interest payments
460 bonds; $1,000 face value; 8% stated rate; 5 years;
semiannual interest payments
890 bonds; $1,000 face value; 8% stated rate; 10 years;
semiannual interest payments
1,830 bonds; $500 face value; 12% stated rate; 15 years;
semiannual interest payments
Use the appropriate
present value table:
PV of $1 and PV of
Annuity of $1
Required:
Assuming the...

The following terms relate to independent bond issues:
A: 420 bonds; $1,000 face value; 8% stated rate; 5 years; annual
interest payments
B: 420 bonds; $1,000 face value; 8% stated rate; 5 years;
semiannual interest payments
C: 840 bonds; $1,000 face value; 8% stated rate; 10 years;
semiannual interest payments
D: 1,990 bonds; $500 face value; 12% stated rate; 15 years;
semiannual interest payments
Use the appropriate present value table: PV of $1 and PV of
Annuity of $1 Required:...

Olympic Corp sold an issue of bonds with a 15-year
maturity, a $1,000 face value, and a 10% coupon rate with interest
being paid semiannually. The market rate of interest when the bonds
were issued was 10%. Two years after the bonds were issued, the
market rate rose to 13%. The most recent common-stock dividend for
Olympic Corp was $3.45 per share. Due to its stable sales and
earnings, the firm’s management predicts dividends will remain at
the current level...

What is the price of a bond with the following features? Face
Value = $1,000 Coupon Rate = 4% (stated as an ANNUAL rate)
Semiannual coupon payments Maturity = 5 years YTM = 4.48% (Stated
as an APR) State your answer to the nearest penny (e.g.,
984.25)

What is the price of a
bond with the following features?
Face Value = $1,000
Coupon Rate = 2% (stated as an ANNUAL rate)
Semiannual coupon payments
Maturity = 5 years
YTM = 4.8% (Stated as an APR)
State your answer to
the nearest penny (e.g., 984.25)

What is the price of a bond with the following features?
Face Value = $1,000
Coupon Rate = 5% (stated as an ANNUAL rate)
Semiannual coupon
payments
Maturity = 9 years
YTM = 4.17% (Stated as an APR)
State your answer to the nearest penny (e.g., 984.25)

Olympic Corp sold an issue of bonds with a 15-year
maturity, a $1,000 face value, and a 10% coupon rate with interest
being paid semiannually. The market rate of interest when the bonds
were issued was 10%. Two years after the bonds were issued, the
market rate rose to 13%. The most recent common-stock dividend for
Olympic Corp was $3.45 per share. Due to its stable sales and
earnings, the firm’s management predicts dividends will remain at
the current level...

PGP Co. expects to issue a $1,000 face-value bond that matures
in 8 years. The annual coupon rate is 9%, and interest payments are
expected to be paid semiannually. Similar bonds are currently
priced at 101.4% of face value. Given this information, what is the
required return by bondholders?
4.38%
8.75%
4.56%
8.49%
9.12%

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