You are considering the purchase of CJ, Inc. bonds that mature in 13 years, and have a 4.75% coupon rate. Coupon payments are made semi-annually, and the bond has a face value of $1,000. If the appropriate required rate rate of return for this bond is 4.45%, what is the value of the bond?
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- Consider a bond that has a face value of $1,000. The bond has a maturity of 25 years and pays coupons of 5.5% per annum. If the bond's required rate of return is 8.0% per annum nominal, and coupons are received semi-annually, what is the current market price of the bond?A bond has a face value of $1,000. If this bond will mature in 5 years, pays interest semiannually, and has a coupon rate of 6%, what is the yield to maturity on this bond if it is currently selling for $720? (Show your work to receive full credit)For a company, you plan to buy the following bond: Time to maturity, 6 years; coupon rate, 8%; Coupon payment, annual; Market interest rate, 8%; Face value, $1,000. Using Excel, calculate the duration of the bond. Using Excel, calculate the accumulated value of invested payment(or receipt) when you find market interest rate a year later is now 8%, 9%, and 7%, respectively. Using Excel, calculate geometric average rate of return (or realized compound return).
- You want to invest in a bond for one year, and are deciding between the following two choices - Bond A and Bond B, both of which have a maturity of 1 year and a par value of $1,000.Bond A is a regular(i.e., nominal- return) with a couponrate of 3% per year, payable semi-annually. The current price of Bond A is $998. Bond B is a real-return bond with a coupon rate of 2% per year, payable annually. The current price of Bond B is $1,000. What is the inflation rate (over the next year) that will make the (nominal) ratesof return of the two choices the same?You purchased a bond for 1,100. The bond has a coupon rate of 9 percent, which is paid semiannually. It matures in 17 years and has a par value of 1,000. What is your expected rate of return. How can i solve this with a financial calculator?The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature in 7 years. Your required rate of return for such an investment is 10% annually. 1. How much should you pay for a $1,000 ARA Corporation bond? Use the bond equation formula.
- Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.6% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? Cash Flows - $113.39 $6.30 $6.30 $6.30 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to one decimal place.) $115.04As with most bonds, consider a bond with a iace value of $1,000. The bond's maturity is 21 years, the coupon rate is 122% paid annually, and the discount rate is 4%. What should be the estimated value of this bond in one year? Enter your answer in terms of dollars, rounded to the nearest cent.You are considering a 10-year, $1,000 par value bond. Its coupon rate is 9%,and interest is paid semiannually. If you require an “effective” annual interest rate (not a nominal rate) of 8.16%, how much should you be willing to pay for the bond?
- Consider a bond with a face value of $1,000. The coupon is paid semiannually and the marketinterest rate (effective annual interest rate) is 8 percent. How much would you pay for the bondif a. the coupon rate is 6 percent and the remaining time to maturity is 10 years?b. the coupon rate is 10 percent and the remaining time to maturity is 15 years?As with most bonds, consider a bond with a face value of $1,000. The bond's maturity is 18 years, the coupon rate is 6% paid annually, and the market yield (discount rate) is 13%. What should be the estimated value of this bond in one year?Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.01% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ The total cash flow at time 4 (after the fourth coupon) is $ negative number.) b. What is the internal rate of return of your investment? (Round to the nearest cent. Enter a cash outflow as a
