A corporate bond matures in 2 years, pays semi-annual coupons, has a coupon rate of 5.8% and a AA credit rating. A 2-year Treasury bond that makes payments on the same days as the corporate bond has a yield to maturity of 2.2% (APR, semiannual compounding). The credit spread on AA bonds is 89 basis points (0.89%). What should be the price of the corporate bond? Assume a $1,000 face value. Assuming a $1,000 face value, the price of the bond is $ (Round to the nearest cent.)

Assume that a company issues a new bond with coupon rate of 11 %, 5% yield and $100 par value bond. Coupon is paid annually. The bond has three years to maturity. (1) What is the Macaulay duration of this bond? (ii) How would you interpret the result obtained in part (e)(i) above?

A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 3.6% and Baa bonds yield 4.6%. Assume a 10% five-year bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. What is the bond's price if it is rated as Aaa?   b. What is the bond's price if it is rated as Baa?

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A bond has the following features: Coupon rate of interest: 5 percent Principal: $1,000 Term to maturity: 10 years a. What will the holder receive when the bond matures? b. If the current rate of interest on comparable debt is 8 percent, whatshould be the price of this bond? Would you expect the firm to callthis bond? Why? c. If the bond has a sinking fund that requires the firm to set aside annuallywith a trustee sufficient funds to retire the entire issue at maturity,how much must the firm remit each year for ten years if the funds earn8 percent annually and there is $100 million outstanding?

A bond has the following features: Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: 11 years   What will the holder receive when the bond matures?   If the current rate of interest on comparable debt is 8 percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   Would you expect the firm to call this bond? Why?  , since the bond is selling for a  . If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for eleven years if the funds earn 8 percent annually and there is $90 million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar. $

A BBB-rated corporate bond has a yield to maturity of 9.3%. AU.S. Treasury security has a yield to maturity of 7.4%. These yields are quoted as APRS with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 8.0% and have five years to maturity. a. What is the price (expressed as a percentage of the face value) of the Treasury bond? b. What in the price (expressed as a percentago of the face value) of the BBB-rated corporato bond? e. What is the credit spread on the BBB bonds? Com a. What is the price (expressed as a percentage of the face value) of the Treasury bond? The price of the Treasury bond as a percentage of face value is%. (Round to three decimal places.)

1. Bond prices and yields (S3.1) A 10-year bond is issued with a face value of $1,000, paying interest of $60 a year. If interest rates increase shortly after the bond is issued, what happens to the bond's a. Coupon rate? b. Price? c. Yield to maturity?

A bond has a $1,000 par, 5% coupon, Pak Treasury bond with 7 years’ maturity. Coupon interest payments are made semiannually and the next coupon payment is exactly six months away. The market interest rate is 6% (nominal rate with semiannual discounting).Required:a) Calculate the current price of this bonds assuming that 10 bonds are held to maturity. b) Explain why a company should consider bonds in its financing structure over other financing options.

Answer the following.