Question

the Lone Star Company has $1000 par value bonds outstanding at 10 percent interest. the bonds...

the Lone Star Company has $1000 par value bonds outstanding at 10 percent interest. the bonds will mature in 20 years. use appendix B and appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
compute the price of the bonds if the present yield to maturity is 7 percent, 9 percent, 12 percent.

Homework Answers

Answer #1
n = 40
I = 3.5%
Cashflows Amount PVF Present value
Semi annual interest 50 21.35507 1067.754
Maturity value 1000 0.252572 252.572
Price of bonds 1320.326
n = 40
I = 4.50%
Cashflows Amount PVF Present Values
Semi annual interest 50 18.40158 920.079
Maturity value 1000 0.171929 171.929
Price of bonds 1092.008
n = 40
I = 6%
Cashflows Amount PVF Present Values
Semi annual interest 50 15.0463 752.315
Maturity value 1000 0.097222 97.222
Price of bonds 849.537
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Midland Oil has $1,000 par value bonds outstanding at 18 percent interest. The bonds will mature...
Midland Oil has $1,000 par value bonds outstanding at 18 percent interest. The bonds will mature in 20 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.     Compute the current price of the bonds if the present yield to maturity is: 15percent_________ 8percent__________ 11percent_________
The Lone Star Company has $1,000 par value bonds outstanding at 10 percent interest. The bonds...
The Lone Star Company has $1,000 par value bonds outstanding at 10 percent interest. The bonds will mature in 20 years. Compute the current price of the bonds if the present yield to maturity is: a) 6 percent b) 9 percent c) 13 percent Please show ALL the work for EACH problem.
Exodus Limousine Company has $1,000 par value bonds outstanding at 17 percent interest. The bonds will...
Exodus Limousine Company has $1,000 par value bonds outstanding at 17 percent interest. The bonds will mature in 50 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the current price of the bonds if the percent yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)    Exodus Limousine Company has $1,000...
Essex Biochemical Co. has a $1,000 par value bond outstanding that pays 12 percent annual interest....
Essex Biochemical Co. has a $1,000 par value bond outstanding that pays 12 percent annual interest. The current yield to maturity on such bonds in the market is 10 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for the maturity dates: (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)...
Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 12 percent annual interest....
Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 12 percent annual interest. The current yield to maturity on such bonds in the market is 10 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)...
Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 14 percent annual interest....
Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 14 percent annual interest. The current yield to maturity on such bonds in the market is 11 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)...
How to you compute CPT PV without a financial calculator? Barry’s Steroids Company has $1,000 par...
How to you compute CPT PV without a financial calculator? Barry’s Steroids Company has $1,000 par value bonds outstanding at 14 percent interest. The bonds will mature in 50 years. If the percent yield to maturity is 11 percent, what percent of the total bond value does the repayment of principal represent? Assume interest payments are annual. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do...
Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have...
Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 10 percent and the interest is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 15 years to maturity. Compute the price of the bonds based on semiannual analysis. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods....
ou are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores....
ou are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 9 percent, which is paid semiannually. The yield to maturity on the bonds is 10 percent annual interest. There are 25 years to maturity. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the price of the...
You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores....
You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 12 percent, which is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 10 years to maturity. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the price of the...