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5. (20 pts) You have been given the opportunity to purchase a $100 Transocean, Inc. corporate...

5. (20 pts) You have been given the opportunity to purchase a $100 Transocean, Inc. corporate bond for $96.24. The bond was issued on 10/1/2001 and matures on 10/1/2031. It has a coupon rate of 7.5% per year and coupons are paid twice a year. If your MARR for bonds of this grade (Moody’s rating = Caa1) is 8.8% per year (nominal) should you purchase the bond today at this price?. You must draw a correct cash flow diagram to get full credit for this problem.

please do your best ASAP thanks

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Answer #1

International bonds: Transocean Ltd, 7.5% 15apr2031, USD
US893830AF64

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Trace-eligible, Senior Unsecured

Issue

Issuer

  • M

    -

    -

  • S&P

    -

    ***

  • F

    -

    ***

STATUS

Outstanding

AMOUNT

588,000,000 USD

PLACEMENT

***

EARLY REDEMPTION

*** (-)

COUNTRY OF RISK

Switzerland

CURRENT COUPON

***%

PRICE

***%

YIELD / DURATION

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