Question

1. A 100-year corporate bond has a coupon rate of
**9**% with semi-annual payments. If the current value
of the bond in the marketplace is $400, then what is the
Yield-to-Maturity (YTM)?

2. How much do you pay for a zero coupon government bond that
has a term of 30 years, an interest rate of **9**%,
and a par value of $1000.

3. A taxable bond has a yield of **9**% and a
municipal bond has a yield of 4.6%. If you are in a 23% tax
bracket, which bond do you prefer?

Answer #1

1. FV = 1,000

N = 100 * 2 = 200 Semi-annual payments

PMT = 1,000 * 0.09/2 = 45

PV = -400

CPT I/Y

I/Y = 11.25%

Yield to maturity = 11.25% * 2

Yield to maturity = 22.5%

2. PV = FV/(1 + r)^n

PV = 1000/(1 + 0.09)^30

PV = $75.371136128

We would pay $75.371136128 for this zero-coupon government bond

3. Income from Municipal bond is tax-free

After-tax yield from municipal bond = 4.6%

After-tax yield from the taxable bond = 9% * (1 - 0.23)

After-tax yield from the taxable bond = 0.0693

After-tax yield from the taxable bond = 6.93%

We would prefer the taxable bond because it has a higher yield even after paying taxes

A 10-year corporate bond has a coupon rate of
9% with annual payments. If the current value of
the bond in the marketplace is $900, then what is the
Yield-to-Maturity (YTM)?

1. A 100-year corporate bond has a coupon rate of
9% with annual payments. If interest rates drop to
4% on similar bonds, then what is the value of the bond in the
marketplace?
2. A 100-year corporate bond has a coupon rate of
9% with monthly payments. If interest rates drop
to 4% on similar bonds, then what is the value of the bond in the
marketplace?

What is the Coupon Rate of a bond that makes semi-annual coupon
payments and has a current price of $967.70, a par value of $1000,
a YTM of 8.2%, and has 13.5 years until maturity?

1. What is the yield on a 18-year bond that pays a semi-annual
coupon of $9 and sells for $1000. Answer as a percent.
2. You are looking at a 9-year zero-coupon bond that has a yield
to maturity of 1.4% . What is the value of the bond? Assume
semi-annual compounding.

A 7 year maturity corporate bond has coupon rate of 7% and pays
coupon semi-annually. Considering Par value of $1000, what would be
the bond price if Effective Annual Yield is 10%?
Please explain all steps, Thanks!

Consider a corporate bond with a 4.3% coupon rate, paid
semi-annually, $1000 par value and a current yield to maturity
(YTM) of 3.7%. It matures in exactly 8 years.
What is the current market price of this bond? [Your
final answer should be ROUNDED TO THE NEAREST DOLLAR, expressed in
dollars only (eg 234) with no cents, and no commas!]
Market Price =

A tax-exempt municipal bond with a coupon rate of 4.00% has a
market price of 98.77% of par. The bond matures in 17.00 years and
pays semi-annually. Assume an investor has a 16.00% marginal tax
rate. The investor would prefer otherwise identical taxable bond if
it's yield to maturity was more than _____%

Casey corporation has a bond outstanding with a coupon rate of
5.56% and semi annual payments. the bond has a yield to maturity of
6.7% a par value of 2000 and matures and 11 years. what is the
quoted price of the bond

A 10-year corporate bond has a coupon rate of
9% with quarterly payments. If interest rates rise
to 8% on similar bonds, then what is the value of the bond in the
marketplace?

A tax-exempt municipal bond with a coupon rate of 6.00% has a
market price of 99.34% of par. The bond matures in 20.00 years and
pays semi-annually. Assume an investor has a 26.00% marginal tax
rate. The investor would prefer otherwise identical taxable bond if
it's yield to maturity was more than _____% (round to 2
decimals)

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