Question

Lycan, Inc., has 8.5 percent coupon bonds on the market that have 8 years left to...

Lycan, Inc., has 8.5 percent coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments and have a par value of $1,000.

If the YTM on these bonds is 10.5 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current bond price            $

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Par value (or face value)=$1000
Time to maturity or number of periods=8 years
Coupon rate=8.5% and the coupon payments are made annually
Coupon payments=Par value*Coupon rate=$1000*8.5%=$85
Yield to maturity=10.5%
Now, we can calculate the present value of the bond using excel.

The current value of the bond=$895.22

Note: As the present value is a cash outflow, it is shown as negative in excel.

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
iPad, Inc., has 8 percent coupon bonds in the market that have 10 years left to...
iPad, Inc., has 8 percent coupon bonds in the market that have 10 years left to maturity. The bonds make semi-annual payments. If the YTM on these bonds is 12 percent, what is the current bond price?
The Petit Chef Co. has 10.1 percent coupon bonds on the market with ten years left...
The Petit Chef Co. has 10.1 percent coupon bonds on the market with ten years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,155.73, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The Timberlake-Jackson Wardrobe Co. has 11.2 percent coupon bonds on the market with eleven years left...
The Timberlake-Jackson Wardrobe Co. has 11.2 percent coupon bonds on the market with eleven years left to maturity. The bonds make annual payments and have a par value of $1,000.    If the bonds currently sell for $1,157.26, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity             %
The Timberlake-Jackson Wardrobe Co. has 11.7 percent coupon bonds on the market with eleven years left...
The Timberlake-Jackson Wardrobe Co. has 11.7 percent coupon bonds on the market with eleven years left to maturity. The bonds make annual payments and have a par value of $1,000.    If the bonds currently sell for $1,153.60, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity   
Staind, Inc., has 11 percent coupon bonds on the market that have 25 years left to...
Staind, Inc., has 11 percent coupon bonds on the market that have 25 years left to maturity. The bonds make semiannual payments. If the YTM on these bonds is 5 percent, what is the current bond price? Answer the question with 2 decimals (e.g. 1030.12)
The Andromeda Co. has new 5% percent coupon bonds on the market with a maturity of...
The Andromeda Co. has new 5% percent coupon bonds on the market with a maturity of 15 years. The bonds make annual payments and have a par value of $1,000. If the bond's current price is $950, what is the YTM? Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1. Staind, Inc., has 7 percent coupon bonds on the market that have 5 years left...
1. Staind, Inc., has 7 percent coupon bonds on the market that have 5 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price? 2. Kiss the Sky Enterprises has bonds on the market making annual payments, with 6 years to maturity, and selling for $870. At this price, the bonds yield 11.0 percent. What must the coupon rate be on the bonds?
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent....
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM = % 2. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments....
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?
Hacker Software has 10.6 percent coupon bonds on the market with 17 years to maturity. The...
Hacker Software has 10.6 percent coupon bonds on the market with 17 years to maturity. The bonds make semiannual payments and currently sell for 108.1 percent of par. What is the current yield on the bonds? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the YTM? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the effective...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT