Question

The Co needs $23 million to grow. They will sell 15yr, $1,000 face value bonds that...

The Co needs $23 million to grow. They will sell 15yr, $1,000 face value bonds that have 0% coupon. The expected YTM is 4 percent. How many bonds are needed to obtain the $23 million? Use annual compounding.
Hint: Solve for bond price, and use this price per bond to solve for the number of bonds to equal the dollar amount needed.

56,688

41,422

20,711

23,000

113,377

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Co needs $30 million to grow. They will sell 10yr, $1,000 face value bonds that...
The Co needs $30 million to grow. They will sell 10yr, $1,000 face value bonds that have 0% coupon. The expected YTM is 5 percent. How many bonds are needed to obtain the $30 million? Use annual compounding. Hint: Solve for bond price, and use this price per bond to solve for the number of bonds to equal the dollar amount needed. Multiple Choice 259,317 48,867 24,433 30,000 129,658
Sun Tans Co. has 7 percent coupon bonds on the market that has 4 years left...
Sun Tans Co. has 7 percent coupon bonds on the market that has 4 years left to maturity. Face value of the bond is $1,000. The bonds make annual coupon payments. If the YTM on these bonds is 11%, what is the current bond price?
PRICING ZERO COUPON BONDS - (a) Calculate the price of a zero coupon, $1,000 face value,...
PRICING ZERO COUPON BONDS - (a) Calculate the price of a zero coupon, $1,000 face value, 5-year bond if the appropriate annual discount rate is 12 percent. Calculate your total return if you hold this bond for three years and the discount rate does not change. (INCLUDE FORMULAS USED TO SOLVE PROBLEM IN EXCEL). EXPECTED RETURN ON T-BILLS - (b) What is the actual expected return on a US government 12-month, T-bill that is priced at $990, assuming its face...
McIntire Corp. is considering the issue of $1,000 face value, 20 year, 9 percent coupon bonds....
McIntire Corp. is considering the issue of $1,000 face value, 20 year, 9 percent coupon bonds. The bonds will make coupon payments on a semi-annual basis. It observes that bonds of Barrett Company are trading at $1079.31, have the same maturity date and pay an annual coupon of 10 percent. If the two bonds are expected to be similar in risk, what price will a bond of McIntire Corp. sell for?
Xanth Co. has 4.2% annual coupon bonds with face value of $1,000 and 5 years remaining...
Xanth Co. has 4.2% annual coupon bonds with face value of $1,000 and 5 years remaining until maturity. The bonds are priced to yield 6.0%. What is the present value of the bonds face value to be repaid at maturity (do not include the coupon payments)? (please solve using N, I/Y, PV, PMT, and FV on a financial calculator)
Xanth Co. has 5.7% annual coupon bonds with face value of $1,000 and 6 years remaining...
Xanth Co. has 5.7% annual coupon bonds with face value of $1,000 and 6 years remaining until maturity. The bonds are priced to yield 6.7%. What is the present value of the bonds coupon payments (do not include the repayment of face value at maturity)? (Please Solve using N, I/Y, PV, PMT and FV on a financial calculator)
1) One year ago, ShopFast issued 15-year annual bonds at par. The bonds had a coupon...
1) One year ago, ShopFast issued 15-year annual bonds at par. The bonds had a coupon rate of 6.5 percent and had a face value of $1,000. Today, the applicable yield to maturity to ShopFast’s bonds is 7%. What was the change in price in ShopFast’s bonds from last year to today? A) -55.56t B) 51.94 C) -$43.73 D) 58.71 E) The bond price did not change. 2) WallStores needs to raise $2.8 million for expansion. The firm wants to...
1.) The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that...
1.) The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. If the required return on this investment is 4.3 percent, how much will you pay for the policy? (Hint: Find PV of perpetuity) 2.) Find the EAR in each of the following cases: a. APR 9% with quarterly compounding b. APR 18% with monthly compounding c. APR 14% with semi-annual compounding 3.) Find the...
The Xylon Firm wants to raise $18 million to expand its business. To accomplish this, the...
The Xylon Firm wants to raise $18 million to expand its business. To accomplish this, the firm plans to sell 10-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 5 percent. What is the minimum number of bonds the firm must sell to raise the $18 million it needs? Use annual compounding.
The MerryWeather Firm wants to raise $25 million to expand its business. To accomplish this, the...
The MerryWeather Firm wants to raise $25 million to expand its business. To accomplish this, the firm plans to sell 20-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 7 percent. What is the minimum number of bonds the firm must sell to raise the $25 million it needs? Use annual compounding.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT