Question

Delray Auto are currently selling at $1,050, with 8% annual coupon payment and 1000 par. These bonds have 16 years left until maturity.

- What is the yield to maturity?
- Assume yield to maturity remain the same, what is the price a year later (with 15 years left until maturity)?
- From current year to next year, calculate the current yield, capital gain, and total return from the bond?

Yield to maturity = ??

Price a year later = ??

Current yield = ??

Capital gain = ??

Total return = ??

Answer #1

A 10-year corporate bond has an annual coupon payment of 5.3%.
The bond is currently selling at par ($1,000). Which of the
following statement is not correct? Why?
The bond’s capital gain yield is 5.3%.
The bond’s yield to maturity is 5.3%.
The bond’s current yield is 5.3%.
If the bond’s yield to maturity remains constant, the bond’s
price will remain at par.

A 25 year, $1000 par value bond has an 8.5% annual payment
coupon. The bond currently sells for $790. If the yield to maturity
remains at its current rate, what will the price be 5 years from
now?

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...

The bonds of ABC Inc are currently selling for $1,250. The
annual coupon payment of these bonds is $90. The bonds have a par
value of $1,000 and a maturity period of 25-years; however, they
are callable in 5 years at the call price of $1,050.Assume that no
additional costs are incurred and that a yield curve is horizontal.
Calculate the difference between the bond's YTM and its
YTC?
Who gets the benefit from callable bonds?

A 6% annual coupon bond has 11 years remaining until maturity.
Par value is $1000.
The required rate of return (yield to maturity)on the bond is
8.5%.
Compute the price of the bond today using the appropriate Excel
formula
Compute the price of the same bond if it has 10 years remaining
to maturity instead of 11.
What is the capital gains yield on the bond?
What is the current yield on the bond?
What is the total yield on...

1.A 6% annual coupon bond (par=$1,000) with 15 years to maturity
is selling for $1,050.
a.What is the bond’s Yield-to-Maturity (YTM)?
b.What is the bond’s current yield (CY)?
c.What is the bond’s capital gains rate or yield (CGY)?

What is the amount of the annual coupon payment for a bond that
has 6 years until maturity, sells for $1,050, and has a yield to
maturity of 9.37%? Show your calculations!
$98.64
$95.27
$101.38
$104.97
Two years ago bonds were issued at par with 10 years until
maturity and a 7% annual coupon. If interest rates for that grade
of bond are currently 8.25%, what will be the market price of these
bonds? Show your calculations!
$917.06
B. $928.84...

1. Analyze the 20-year, 8% coupon rate (Semi-annual payment),
$1,000 par value bond. The bond currently sells for $1,218. What's
the bond's yield to maturity?
A. 5.06%
B. 5.68%
C. 5.38%
D. 6.10%
2. Analyze the 20-year, 8% coupon rate (Semi-annual payment),
$1,000 par value bond. The bond currently sells for $1,218. What's
the bond's current yield, and capital gain yield? (Please show your
work)
A. 6.57%, -0.47%
B. 6.07%, -0.69%
C. 6.57%, -0.47%
D. 6.07%, 0.69%

A 30-year, $1,000 par value bond has an annual payment coupon of
7.5%. The bond currently sells for $910. If the yield to maturity
remains at its current rate what will the price be 10 years from
now?

•A 20-year, $1,000 par value bond has an 6.5% annual payment
coupon. The bond currently sells for $1025. If the yield to
maturity remains at its current rate, what will the price be 8
years from now?

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