10. Bond listings and yield spreads The following bond list is from the business section of a newspaper on January 1, 2016. Notice that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon and the coupon rate is in the column labeled Coupon. The Last Price and Last Vield columns indicate each bond's price and VTM at the end of trading. EST Spread indicates the bond's spread above the relevant US Treasury benchmark, given as a percentage. UST indicates which US Treasury security maturity is the relevant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Prices are stated relative to a par value of $100. Fill in the nominal VTM for Pickman Inc.'s bonds. (Note: Do not round your intermediate calculations.) Company Schubert Inc. Chapman Inc. Rust Inc. Murphy & Co. Pickman Inc. 10.15% 12.58% 12.05% Coupon Maturity Last Price 8.13% 01-01-2026 $82.25 9.63% 01-01-2046 $80.48 $95.18 4.50% 01-01-2021 5.38% 01-01-2021 $101.02 7.75% 01-01-2026 $93.11 If Chapman Inc. wants to issue new 30-year bonds today, what coupon rate would the bonds have to pay to be issued at par? O 11.65% Last Yield 11.11% 12.05% 5.62% 5.14% EST Spread UST (Years) EST Volume (1000s) 6.20% 10 72,070 7.15% 30 65,275 1.37% 5 59,277 0.89% 5 3.89% 10 57,465 56,305
10. Bond listings and yield spreads The following bond list is from the business section of a newspaper on January 1, 2016. Notice that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon and the coupon rate is in the column labeled Coupon. The Last Price and Last Vield columns indicate each bond's price and VTM at the end of trading. EST Spread indicates the bond's spread above the relevant US Treasury benchmark, given as a percentage. UST indicates which US Treasury security maturity is the relevant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Prices are stated relative to a par value of $100. Fill in the nominal VTM for Pickman Inc.'s bonds. (Note: Do not round your intermediate calculations.) Company Schubert Inc. Chapman Inc. Rust Inc. Murphy & Co. Pickman Inc. 10.15% 12.58% 12.05% Coupon Maturity Last Price 8.13% 01-01-2026 $82.25 9.63% 01-01-2046 $80.48 $95.18 4.50% 01-01-2021 5.38% 01-01-2021 $101.02 7.75% 01-01-2026 $93.11 If Chapman Inc. wants to issue new 30-year bonds today, what coupon rate would the bonds have to pay to be issued at par? O 11.65% Last Yield 11.11% 12.05% 5.62% 5.14% EST Spread UST (Years) EST Volume (1000s) 6.20% 10 72,070 7.15% 30 65,275 1.37% 5 59,277 0.89% 5 3.89% 10 57,465 56,305
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:10. Bond listings and yield spreads
The following bond list is from the business section of a newspaper on January 1, 2016. Notice that each bond shown matures on January 1 in 5, 10,
or 30 years. Each bond shown pays a semiannual coupon and the coupon rate is in the column labeled Coupon.
The Last Price and Last Vield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the bond's spread above the
relevant US Treasury benchmark, given as a percentage. UST indicates which US Treasury security maturity is the relevant benchmark for each bond.
EST Volume shows the number of bonds traded during the day. Prices are stated relative to a par value of $100.
Fill in the nominal YTM for Pickman Inc.'s bonds. (Note: Do not round your intermediate calculations.)
Company
Schubert Inc.
Chapman Inc.
Rust Inc.
Murphy & Co.
Pickman Inc.
O 10.15%
O 12.58%
Coupon Maturity Last Price
8.13% 01-01-2026 $82.25
9.63% 01-01-2046 $80.48
4.50%
01-01-2021
$95.18
5.38% 01-01-2021
$101.02
7.75% 01-01-2026 $93.11
O 12.05%
O 11.65%
Last Yield
11.11%
12.05%
5.62%
5.14%
EST Spread UST (Years)
6.20%
10
7.15%
30
1.37%
0.89%
3.89%
in
If Chapman Inc. wants to issue new 30-year bonds today, what coupon rate would the bonds have to pay to be issued at par?
10
EST Volume (1000s)
72,070
65,275
59,277
57,465
56,305
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