Question

A Japan-based company, Sumo Gyms, Inc., issues a 35-year, semi-annual coupon bond, with a ¥300 million...

A Japan-based company, Sumo Gyms, Inc., issues a 35-year, semi-annual coupon bond, with a ¥300 million par value. The coupon rate is given as 6.20%, and the yield to maturity is 7.15.

a. What is the value of the semi-annual coupon on the bond?

b. What is the price of the bond?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Information provided:

Par value=future value= 300 million yen

Time= 35 years*2= 70 semi-annual periods

Coupon rate= 6.20%/ 2= 3.10%

Yield to maturity= 7.15%/2 = 3.5750% per semi-annual

a.Value of semi-annual coupon = 3.10%*300 million

= 9.30 million yen.

The price of the bond is calculated by computing the present value.

Enter the below in a financial calculator to compute the present value:

FV= 300

N= 70

PMT= 9.30

I/Y= 3.5750

Press the CPT key and PV to compute the present value.

The value obtained is 263.55.

Therefore, the price of the bond is 263.55 million yen.

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
A company issues a​ ten-year bond at par with a coupon rate of 6.1​% paid​ semi-annually....
A company issues a​ ten-year bond at par with a coupon rate of 6.1​% paid​ semi-annually. The YTM at the beginning of the third year of the bond​ (8 years left to​ maturity) is 8.9​%. What is the new price of the​ bond?
A company issues a​ ten-year bond at par with a coupon rate of 6.1% paid​ semi-annually....
A company issues a​ ten-year bond at par with a coupon rate of 6.1% paid​ semi-annually. The YTM at the beginning of the third year of the bond​ (8 years left to​ maturity) is 99​%. What is the new price of the​ bond? A. $1,005 B. $837 C. $1,172 D. ​$1,000
PART 2 - BOND CALCULATIONS a) What is the price of a $1,000 par value, semi-annual...
PART 2 - BOND CALCULATIONS a) What is the price of a $1,000 par value, semi-annual coupon bond with 16 years to maturity, a coupon rate of 5.40% and a yield-to-maturity of 5.90%? b) What is the price of a $1,000 par value, 10 year, annual coupon bond with a 5.80% coupon rate and a yield to maturity of 5.50% c) A 10-year, 6.30% semi-annual coupon bond today and the current market rate of return is 5.60%. The bond is...
The semi-annual bonds of Delta Company have a coupon rate of 6%, a Yield to Maturity...
The semi-annual bonds of Delta Company have a coupon rate of 6%, a Yield to Maturity of 8%, a par value of $1,000, and 20-years to maturity. a. Calculate the price of a Delta Company bond today. b. What will be the price of a Delta Company bond in 1 year if the YTM decreases to 7%?
A 20-year, $1,000 par value bond has a 9% semi-annual coupon. The bond currently sells for...
A 20-year, $1,000 par value bond has a 9% semi-annual coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 8 years from now? a. $937.7 b. $956.95 c. $939.85 d. $503.21
A 20-year, $1,000 par value bond has a 9% semi-annual coupon. The bond currently sells for...
A 20-year, $1,000 par value bond has a 9% semi-annual coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 10 years from now? a. $935.01 b. $930.01 c. $952.84 d. $945.72
AbC Corporations (ABC) issues a bond that pays 10% semi-annual coupon, have a $1,000 face value,...
AbC Corporations (ABC) issues a bond that pays 10% semi-annual coupon, have a $1,000 face value, and mature in 10 years. If ABC bonds are sold to yield 8%, what is the price of ABC bond at the end of year 2. If ABC issue the same bond (same coupon rate, face value and maturity) with ‘callable’ feature, would the price of ABC bond be lower or higher? Explain.
****PLEASE SHOW IN EXCEL*** 4. Johnson Jay Inc. issues a 9 percent coupon bond with 24...
****PLEASE SHOW IN EXCEL*** 4. Johnson Jay Inc. issues a 9 percent coupon bond with 24 years maturity, $1,000 face (par) value, and semi-annual coupon payments. If the current market price of this bond is $751, find its yield to maturity. A. 12.23% B. 8.34% C. 12.95% D. 7.98% E. none of the answers is correct
Q3) What is the price of a $1,000 par value, semi-annual coupon bond with 15 years...
Q3) What is the price of a $1,000 par value, semi-annual coupon bond with 15 years to maturity, a coupon rate of 03.60% and a yield-to-maturity of 08.70%? (1 point)
16. A 10-year bond, $100 face value bond with a 8% coupon rate and semi-annual coupons...
16. A 10-year bond, $100 face value bond with a 8% coupon rate and semi-annual coupons has a yield maturity of 5%. The bond should be trading at a price of $.___ Round to the nearest cent. 17. XYZ company has just issued a 30-year bond with a coupon rate of %7.5 (annual coupon payments) and a face value of $1,00. If the yield to maturity is 11%, what is the price of the bond. Round to the nearest cent....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT