Assume a zero-coupon bond was issued with a face value of $1 000 000 and net proceeds from the issue were 95% of this amount. If the bond had 10 years to maturity, calculate the approximate before-tax cost of this zero-coupon bond: Select one: A. 0.51% B. 5% O C. 12% O D. 5.21%
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- Using Table 2 (PV$1), find the Present Value (PV) Factor used to calculate the PV of the lump sum bond payment for this bond: Bond #1 Face Value $100 Stated Rate = 8% Market Rate = 6% Time to Maturity = 5-Years Quarterly PaymentsSuppose a 10% 3years bond with a FV of $1000 Spot rates r1= 10%, r2= 12%, r3=13%. Calculate the forward rate required to calculate the bond price using the forward rate 1f2You buy an 8-year, 3.30% annual - payment coupon bond priced to yield 5.30 %. You sell the bond at year - end, immediately after receiving the first coupon payment. Assuming the YTM stayed constant over the holding period, what are your capital gains from the sale of the bond? A. -0.09 B. -0.02 C. 0.02 D. 0.09
- What is the present value of a $500,000 12-year Bond with annual interest payments of $40,000 (contract rate of 8%) assuming an effective rate of 10%? You must show work to receive credit for this problem. Paragraph Lato (Recom... v 19px... ✓ T BI U A V => DC + v ...A) You invest OMR 900 in a bond which gives 9% interest over a period of 2 years, the compounding is done quarterly. How much will be the value of the investment? Select one: a. 1053.24 b. 1254.74 c. 1075.34 d. 753.24 B) Which of the statements are not correct Select one: a. Profits refers to earnings before Interest and Taxes b. Investment decisions relate to pattern of financing c. Dividend pay out ratio refers to what proportion is paid to shareholders d. Borrowed funds are relatively cheaper than shareholders’ fundsGiven the following information on a bond, Par value: $1000 Interest rate: 6% Coupon rate: 8% paid semiannually Years to maturity: 15 years, what is the expected price at the end of year 5? Question 7Select one: a. 1145.32 b. 1152.98 c. 1148.77 d. 1141.97 please show math and explanation..
- Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is * P1,560.00 P1,540.00 P1,440.00 O P1,442.31What is the Holding period return____% Purchase price of the bond (pv) $910 Sale price of the bond after 2 years (fv) $966.98 Number of coupon payments received (nper) 2 Coupon payment (pmt) $82.00A 7-year, 10% annual-pay bond has a par value of $1,000. If its yield-to-maturity (YTM) is 12.4%, the amount earned from reinvestment of the coupon payment is closest to A. $239.47. B. $321.41. C. $480.06. D. $500.79.
- 0. A 9,000 3 ½% bond with monthly coupon is priced to yield 5% and redeemable at par atthe end of 10 years. Find the purchase price and bond discount. (Accumulation of DiscountAssume that a $10,000.00 bond paying 8.5% interest is currently selling at 106. What is the current selling price of the bond? What is the current yield of this bond? a. b. (Given the following spot rates, calculate the value of a 3-year, 6% annual-coupon bond. Spot rates: 1-year: 5% 2-year: 5% 3-year: 6% A. $1,001.56 B. $1,044.73 C. $1,094.56 D. $1,114.29