A company is planning to issue perpetual, callable bonds with a coupon rate of 8% paid annually, and a par value of $1,000. The nominal interest rate on these bonds will be 9% for the next year. In one year, the nominal rate on the bonds will be either 10% with probability 0.6, or 8% with probability 0.4. The bonds are callable at $1200. Assuming the bonds are called if the interest rate decreases, what is the price of the callable bond today?
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A company is planning to issue perpetual, callable bonds with a coupon rate of 8% paid annually, and a par value of $1,000. The nominal interest rate on these bonds will be 9% for the next year. In one year, the nominal rate on the bonds will be either 10% with probability 0.6, or 8% with probability 0.4. The bonds are callable at $1200. Assuming the bonds are called if the interest rate decreases, what is the price of the callable bond today?
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- A Boba Drinks LLC. is considering to issue perpetual, callable bonds with a coupon rate of 5% paid annually, and a par value of $1,000. The nominal interest rate on these bonds will be 8% for the next year. Within a year, the nominal rate on the bonds will be either 12% with probability 0.7, or 9% with probability 0.3. The bonds are callable at $1400. If the bonds are called and the interest rate decreases, what is the price of the callable bond today?Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1, 000. The bonds are callable at $1, 230. One year interest rates are 8 percent. There is a 60 percent probability that long-term interest rates one year from today will be 10 percent, and a 40 percent probability that they will be 8 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Lisa's new firm plans to issue a permanent callable bond with a par value of $1,000 and a nominal rate of 5% yearly. The nominal interest rate on these bonds will be 8% next year. Then a year from now, the bond's nominal interest rate will be 9% or 6% with the equal probability(50%). These bonds can be redeemed for $1350. If the bond is called when the interest rate decreases, calculate the callable bond price for today?
- Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1,000. The bonds are callable at $1,255. One-year interest rates are 8 percent. There is a 60 percent probability that long-term interest rates one year from today will be 9 percent, and a 40 percent probability that they will be 7 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1,000. The bonds are callable at $1,140. One-year interest rates are 9 percent. There is a 60 percent probability that long-term interest rates one year from today will be 10 percent and a 40 percent probability that they will be 8 percent. Assume that if interest rates fall, the bonds will be called. What coupon rate should the bonds have in order to sell at par value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Please answer fast I give you upvoteBandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1,000. The bonds are callable at $1,275. One-year interest rates are 12 percent. There is a 60 percent probability that long-term interest rates one year from today will be 13 percent, and a 40 percent probability that they will be 11 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value?
- Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1,000. The bonds are callable at $1,250. One-year interest rates are 12 percent. There is a 60 percent probability that long-term interest rates one year from today will be 13 percent, and a 40 percent probability that they will be 11 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1,000. The bonds are callable at $1,260. One-year interest rates are 9 percent. There is a 60 percent probability that long-term interest rates one year from today will be 10 percent, and a 40 percent probability that they will be 8 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) (/explain well with step by step answer).A mortgage bond issued by Automation Engineering is for sale for $8,900. The bond has a face value of $10,000 with a coupon rate of 5% per year, payable annually. What rate of return will be realized if the purchaser holds the bond to maturity 9 years from now? The rate of return will be % per year.
- A mortgage bond issued by Automation Engineering is for sale for $8,700. The bond has a face value of $10,000 with a coupon rate of 7% per year, payable quarterly. What rate of return will be realized if the purchaser holds the bond to maturity 8 years from now?A mortgage bond issued by Automation Engineering is for sale for $8,700. The bond has a face value of $10,000 with a coupon rate of 7% per year, payable quarterly. What rate of return will be realized if the purchaser holds the bond to maturity 8 years from now? The rate of return will be % per year.A mortgage bond issued by Automation Engineering is for sale for $8,800. The bond has a face value of $10,000 with a coupon rate of 7% per year, payable monthly. What rate of return will be realized if the purchaser holds the bond to maturity 10 years from now? The rate of return will be % per year.