A one-year U.S. Treasury bond and a one-year corporation bond both promise to pay $11,934 next year. The corporation bond carries a risk premium of 15 percent over Treasury bond. The price of the Treasury bond today is $11,700. What is the price of the corporation bond? Price of the corporation bond = dollars.
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- Suppose a U.S. government bond pays $2,155.40 in 5 years at 6% interest. Calculate the present value of the bond.An investor gathers the following data on three newly-issued bonds: 1-year government bond, 3.0% yield 1-year ABC corporate bond, 4.2% yield 10-year government bond, 3.8% yield If investors require a 0.5% liquidity premium for corporate bonds, what are the components of the required return on a 10-year ABC bond?The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 12 years until maturity. You can purchase the bond for $955. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 11 percent?
- A $1,000 face value bond issued by the Purud Company currently pays total annual interest of $80 per year and has a 13-year life. a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond? b-How would your answer in (a) change if the bond is a U.S. bond? c-How would your answer in (b) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purud bond? d-Suppose the original bond can be purchased for $925. What is the bond's yield to maturity?A bond promises to pay $150 in one year. What is the interests rate on the bond if its price today is $65,$75 and $85?A corporate bond matures in five years. This bond’s credit spread over comparable maturity Treasury Bonds is 3.25%. Treasury bond yields are currently 2.125%, 4.375%, and 6.250% for 2-year, 5-year, 10-year maturity bonds, respectively. What is the cost of debt for the firm which issued the bond?
- the Saleemi Corporation's $1,000 bonds pay 11 percent interest annually and have 12 years until maturity. You can purchase the bond for $895. a. what is the yield to maturity on this bond? b. should you purchase the bond if the yield to maturity on a comparable - risk bond is 14 percent?Treasury notes and bonds. Use the information in the following table: . Assume a $100,000 par value. What is the yield to maturity of the August 2000 Treasury bond with semiannual payment? Compare the yield to maturity and the current yield . How do you explain this relationship? What is the yield to maturity of the August 2000 Treasury bond?(Bond valuation relationships) Stanley, Inc. issues 10-year $1,000 bonds that pay $85 annually. The market price for the bonds is $1,034. The market's required yield to maturity on a comparable-risk bond is 8 percent. a. What is the value of the bond to you? b. What happens to the value if the market's required yield to maturity on a comparable-risk bond (i) increases to 12 percent or (ii) decreases to 6 percent? c. Under which of the circumstances in part b should you purchase the bond? 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 percent? $enter your response here (Round to the nearest cent.)
- (Bond valuation relationships) Stanley, Inc. issues 15-year $1,000 bonds that pay $90 annually. The market price for the bonds is $1,182. The market's required yield to maturity on a comparable-risk bond is 7 percent. a. What is the value of the bond to you? b. What happens to the value if the market's required yield to maturity on a comparable-risk bond (i) increases to 11 percent or (ii) decreases to 5 percent? c. Under which of the circumstances in part b should you purchase the bond? a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 7 percent? (Round to the nearest cent.) $Consider the following three bond quotes: a Treasury note quoted at 95.84, a corporate bond quoted at 102.85, and a municipal bond quoted at 101.50. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5, 000, what are the prices of these three bonds in dollars?(Bond valuation relationships) Stanley, Inc. issues 15-year $1,000 bonds that pay $95 annually. The market price for the bonds is $1.128. The market's required yield to maturity on a comparable-risk bond is 8 percent. a. What is the value of the bond to you? b. What happens to the value if the market's required yield to maturity on a comparable-risk bond (1) increases to 13 percent or (i) decreases to 6 percent? c. Under which of the circumstances in part b should you purchase the bond? CUL 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. (1) What is the value of the bond if the market's required yield to maturity on a comparable-risk bond increases to 13 percent? $(Round to the nearest cent.) b. (4) 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. Under which of the circumstances in…