a Calculate the value of the bond b. How does the value change if the market's required yield to maturity on a comparable-risk bond () increases to 10 percent or ) decreases to 6 percent? c. Explain the implications of your answers in part b as they relate to interest-rate risk, premium bonds, and discount bonds.
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- (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $80 in interest, with a $1,000 par value. It matures in 20 years. The market's required yield to maturity on a comparable-risk bond is 6 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 10 percent or (ii) decreases to 5 percent? c. Explain the implications of your answers in part b as they relate to interest-rate risk, premium bonds, and discount bonds. d. Assume that the bond matures in 10 years instead of 20 years. Recompute your answers in parts a and b. e. Explain the implications of your answers in part d as they relate to interest-rate risk, premium bonds, and discount bonds. a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 6 percent? (Round to the nearest cent.) $(Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value. It matures in 20 years. The market's required yield to maturity on a comparable-risk bond is 6 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 12 percent or (ii) decreases to 5 percent? c. Explain the implications of your answers in part b as they relate to interest-rate risk, premium bonds, and discount bonds. d. Assume that the bond matures in 5 years instead of 20 years. Recompute your answers in parts a and b. e. Explain the implications of your answers in part d as they relate to interest-rate risk, premium bonds, and discount bonds.(Bond valuation relationships) Arizona Public Uslities issued a bond that pays $70 in interest, with a $1,000 par value. It matures in 30 years. The market's required yield to maturity on a comparable-sk bond is 8 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 12 percent or (4) decreases to 7 percent? c. Explain the implications of your answers in part b as they relate to interest-rate risk, premium bonds, and discount bonds. d. Assume that the bond matures in 5 years instead of 30 years. Recompute your answers in parts a and b e. Explain the implications of your answers in part d as they relate to interest-rate risk, premium bonds, and discount bonds. GALLE a. What is the value of the bond if the marker's required yield to maturity on a comparable-risk bond is 8 percent? $ 887 42 (Round to the nearest cent.) b. () What is the value of the bond if the market's required yield…
- (Bond valuation relationships) A bond of Telink Corporation pays $100 in annual interest, with a $1,000 par value. The bonds mature in 30 years. The market's required yield to maturity on a comparable-risk bond is 8 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 14 percent or (ii) decreases to 6 percent? c. Interpret your findings in parts a and b. a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 8 percent? $ (Round to the nearest cent.) b. (i) What is the value of the bond if the market's required yield to maturity on a comparable risk bond increases to 14 percent? (Round to the nearest cent.) b. (ii) What is the value of the bond if the market's required yield to maturity on a comparable risk bond decreases to 6 percent? (Round to the nearest cent.) c. The change in the value of a bond caused by changing interest…(Bond valuation relationships) A bond of Visador Corporation pays $90 in annual interest, with a $1,000 par value. The bonds mature in 19 years. The market's required yield to maturity on a comparable-risk bond is 9.5 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 11 percent or (ii) decreases to 6 percent? c. Interpret your finding in parts a and b. a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 9.5 percent? $(Round to the nearest cent.)(Bond valuation relationships) A bond of Visador Corporation pays $70 in annual interest, with a $1,000 par value. The bonds mature in 18 years. The market's required yield to maturity on a comparable-risk bond is 8.5 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 12 percent or (ii) decreases to 4 percent? c. Interpret your finding in parts a and b. Question content area bottom Part 1 a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 8.5 percent? $enter your response here (Round to the nearest cent.)
- (Yield to maturity) Fitzgerald's 35-year bonds pay 8 percent interest annually on a $1,000 par value. If the bonds sell at $945, what is the bond's yield to maturity? What would be the yield to maturity if the bonds paid interest semiannually? Explain the difference. a. The bond's yield to maturity if the bond pays interest annually is %. (Round to three decimal places.)(Bond valuation relationships) A bond of Telink Corporation pays $110 in annual interest, with a $1,000 par value. The bonds mature in 15 years. The market's required yield to maturity on a comparable-risk bond is 9 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 12 percent or (ii) decreases to 5 percent? c. Interpret your findings in parts a and b. a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 9 percent? (Round to the nearest cent.)(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) Fingen's 19-year, $1,000 par value bonds pay 11 percent interest annually. The market price of the bonds is $1,050 and the market's required yield to maturity on a comparable-risk bond is 12 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? nothing% (Round to two decimal places.)
- (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) Fingen's 19-year, $1,000 par value bonds pay 12 percent interest annually. The market price of the bonds is $920 and the market's required yield to maturity on a comparable-risk bond is 15 percent. a. Compute the bond's yield to maturity b. Determine the value of the bond to you, given your required rate of return c. Should you purchase the bond? RCEDE a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? % (Round to two decimal places.)(Bond valuation relationships) A bond of Telink Corporation pays $120 in annual interest, with a $1,000 par value. The bonds mature in 15 years. The market's required yield to maturity on a comparable-risk bond is 10 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 13 percent or (ii) decreases to 5 percent? c. Interpret your findings in parts a and b. Question content area bottom Part 1 a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 10 percent? $enter your response here (Round to the nearest cent.)(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) Fingen's 11-year, $1,000 par value bonds pay 13 percent interest annually. The market price of the bonds is $1,070 and the market's required yield to maturity on a comparable-risk bond is 10 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? ( a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? 11.83% (Round to two decimal places.) b. What should be the value of the Fingen bonds given your required rate of return on a comparable-bond? (Round to the nearest cent.)