Question

c) CleanUp Industries Inc. is issuing a zero-coupon bond that will have a maturity of thirty years. The bond's par value is $1,000, and the current yield on similar bonds is 5.5%. What is the expected price of this bond, using the semiannual convention?

d) Free-Up Inc. has issued 30-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 8% and the current yield to maturity is 5%, what is the firm's current price per bond?

Answer #1

Zero-coupon bond. Addison Company will issue a zero-coupon bond
this coming month. The bond's projected yield is 8%. If the par
value is $1,000, what is the bond's price using a semiannual
convention if
a. the maturity is 20 years?
b. the maturity is 35 years?
c. the maturity is 60 years?
d. the maturity is 80 years?

What is the price of a $1000 face value zero-coupon bond with 4
years to maturity if the required return on these bonds is 3%?
Consider a bond with par value of $1000, 25 years left to
maturity, and a coupon rate of 6.4% paid annually. If the yield to
maturity on these bonds is 7.5%, what is the current bond
price?
One year ago, your firm issued 14-year bonds with a coupon rate
of 6.9%. The bonds make semiannual...

Zero-coupon bond. Wesley Company will issue a zero-coupon bond
LOADING... this coming month. The projected bond yield LOADING...
is 6%. If the par value LOADING... is $5,000, what is the bond's
price using a semiannual convention if
a. the maturity LOADING... is 10 years?
b. the maturity is 40 years?
c. the maturity is 60 years?
d. the maturity is 100 years?
Part B
Callable bond. Corso Books has just sold a callable bond. It is
a thirty-year monthly bond...

b.Suppose a ten-year, $1,000 bond with an 8.8% coupon rate and
semiannual coupons is trading for $1,035.87.
a. What is the bond's yield to maturity (expressed as an APR
with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.6% APR, what
will be the bond's price?
C. Suppose that General Motors Acceptance Corporation issued a
bond with 10 years until maturity, a face value of $1,000, and a
coupon rate of 7.6% (annual payments). The yield to...

Consolidated Cardboard, Inc. issued a 15-year, $1,000 par value
bond with a coupon rate of 9%. The current yield to maturity on
similar bonds is 11%. Calculate the price of Cardboard’s bond.

Madsen Motors's bonds have 18 years remaining to maturity.
Interest is paid annually, they have a $1,000 par value, the coupon
interest rate is 11%, and the yield to maturity is 12%. What is the
bond's current market price? Round your answer to the nearest
cent.
Nesmith Corporation's outstanding bonds have a $1,000 par value,
a 12% semiannual coupon, 10 years to maturity, and a 16% YTM. What
is the bond's price? Round your answer to the nearest cent.
A...

- Nesmith Corporation's outstanding bonds have a $1,000 par
value, an 8% semiannual coupon, 9 years to maturity, and a 10% YTM.
What is the bond's price?
- A firm's bonds have a maturity of 10 years with a $1,000 face
value, have an 8% semiannual coupon, are callable in 5 years at
$1,054.06, and currently sell at a price of $1,105.17. What are
their nominal yield to maturity and their nominal yield to
call?

14. Bonds that mature in 10 years were recently issued by Smart
glass Inc. They have a par value of $1,000 and the annual coupon
rate is 5.5%. If the current yield to maturity on similar risk
bonds is 7.0%, at what price should the bonds sell?
15. Hamilton Corporation's bonds will mature in 15 years. The
bonds have a face value of $1,000 and an 8% coupon rate, paid
semiannually. The price of the bonds is $1,050.
What is...

1. A 9-year zero coupon bond has a yield to maturity of
11.8 percent, and a par value of $1,000. What is the
price of the bond?
2. A 7-year bond has a 8 percent coupon rate with the interest
paid in semi annual payments. The yield to maturity of
the bond is 2.3 percent, and a face value of
$1,000. What is the price of the bond?
3. A 12-year bond has a 9 percent annual coupon, a yield to
maturity of...

You are purchasing a 25-year, zero-coupon bond from Gem, Inc.
The yield to maturity is 8.68% and the face value is $1,000. What
is the current market price?
PLEASE TRY TO BE A SIMPLE AS POSSIBLE, preferably using
excel!

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