The Chauncey Company currently has a bond outstanding with a coupon rate of 10 percent and semiannual payments. The bond is currently selling for $866.85. The bond matures in 17 years and has a par value is $1,000. What is the yield to maturity (YTM) of The Chauncey Company's bonds?
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- The Chauncey Company currently has a bond outstanding with a coupon rate of 10 percent and semiannual payments. The bond is currently selling for $866.85. The bond matures in 17 years and has a par value is $1,000. What is the yield to maturity (YTM) of The Chauncey Company's bonds?
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- Verbrugge Company has a level-coupon bond outstanding that pays coupon interest of $120 per year and has 10 years to maturity. The face value of the bond is $1,000. If the yield for similar bonds is currently 14%, what is the bond’s current market value? For the Verbrugge Company bond described in Problem 1, find the bond’s value if the yield for similar bonds decreases to 12%. For the Verbrugge Company bond described in Problem 1, find the bond’s value if the yield for similar bonds decreases to 9%. Suppose the Verbrugge bond paid interest semiannually. What is its value if the yield is 14%? A firm issues an annual bond today with a $1,000 face value, an 8% annual coupon interest rate, and 25-year maturity. An investor purchases the bond for $1,000. What is the yield to maturity (YTM)? Suppose the investor bought the bond described in the previous problem for $900. What’s the YTM?AAA company plans to issue bonds to expand operations. The bonds will have a par value of $1,000, a 10-year maturity, and a coupon interest rate of 9%, paid semiannually. Current market conditions are such that the bonds will be sold to net $937.79. What is the yield-to-maturity of these bonds?Blossom Corp is issuing a 10-year bond with a coupon rate of 13 percent. The interest rate for similar bonds is currently 7 percent. Assuming annual payments, what is the value of the bond? Assume face value is $1000. Value of bond? $
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- A company has decided to issue bonds with annual coupon payments. The bonds will have a par value of $1,000, 20 years to maturity, and a coupon rate of 9.6 percent paid annually. If the bond's yield to maturity is 8.3 percent, what is the price of the bond?Suppose a firm is issuing 10,000 bonds. Each bond has a face amount of $950, a stated rate of 7.5%, and an 18-year term. When the bonds are issued, the market rate for similar bonds is 6.8%. What is the coupon (interest) payment of this bond? Based on the coupon (interest) payment found in (1.), what is the bond price when issued given the market rate of 6.8%? Based on your answer to (2.), explain why investors are either willing to pay more or less than the face amount of $950? How much capital does the firm raise assuming all 10,000 bonds are sold at the bond price you found in (2.)? Suppose after 8 years an investor decides to sell their bond for $925. What is the yield to maturity after 8 years given the bond price of $925? Based on the yield to maturity you calculated in (5.), is the bond at par, a premium bond, or a discount bond? Why? What is the bond price after the 8th year if the yield to maturity is 7.5%?Crane, Inc., has four-year bonds outstanding that pay a coupon rate of 7.00 percent and make coupon payments semiannually. If these bonds are currently selling at $919.89. What is the yield to maturity that an investor can expect to earn on these bonds? What is the effective annual yeild?
