Bond valuation relationship  the 13 year $1,000 par value bonds of Waco industries pay 12 percent interest annually. The market price of the bond is $1155, and the market's required yield to maturity on a comparable risk bond is 8 percent  a. Compute the bond's yield to maturity  b. Determine the value of the bond to you given the market's required yield to maturity on a comparable risk bond c. Should you purchase the bond?

A 12% bond of Alpha Company with 15 year to maturity is selling in the market for $955, it has a $1,000 par value and pays interest annually. a. Calculate the both bond's yield to maturity (YTM).b. If your required rate of return is 12% would you buy this bond or not.b. Describe the relationship between the coupon rate and yield to maturity and market value of a bond.

Basic bond valuation Complex Systems has an outstanding issue of $1,000-par-value bonds with a 11% coupon interest rate. The issue pays interest annually and has 15 years remaining to its maturity date a. If bonds of similar risk are currently eaming a rate of return of 9%, how much should the Complex Systems bond sell for today? b. Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond. c. If the required return were at 11% instead of 9%, what would the current value of Complex Systems' bond be? Contrast this finding with your findings in part a and discuss.

The 12​-year ​$1,000 par bonds of Vail Inc. pay 8 percent interest. The​ market's required yield to maturity on a​ comparable-risk bond is 12 percent. The current market price for the bond is $850.   a.  Determine the yield to maturity. b.  What is the value of the bonds to you given the yield to maturity on a​ comparable-risk bond? c.  Should you purchase the bond at the current market​ price?       Question content area bottom Part 1 a. What is your yield to maturity on the Vail bonds given the current market price of the​ bonds?   enter your response here​% ​ (Round to two decimal​ places.)

Bond A: 10 Year annual bond, price $1010, coupon rate 6%, par $1000 Bond B: 10 year semi-annual bond, price $1010, coupon rate 6%, par $1000 Does Bond A have a higher cost of debt than Bond B?

wo 30-year maturity mortgage-backed bonds are issued. The first bond has a par value of $10,000 and promises to pay a 7.5 percent annual coupon, while the second is a zero coupon bond that promises to pay $10,000 (par) after 30 years, with interest accruing at 7.0 percent. At issue, bond market investors require a 9.0 percent interest rate on both bonds.   Required: a. What is the initial price on each bond? b. Now assume that both bonds promise interest at 7.5 percent, compounded semiannually. What will be the initial price for each bond? c. If market interest rates fall to 6.5 percent at the end of the fifth year, what will be the value of each bond, assuming annual payments as in (a) (state both as a percentage of par value and actual dollar value)?

A $1,000 face value bond issued by the Purdue Company currently pays total annual interest of $80 per year and has a 15-year life.   a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality bond?   b.  How would your answer change is the bond makes semi-annual payments?   c-How would your answer in (a) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purdue bond? d-Suppose the original bond can be purchased for $925. What is the bond’s yield to maturity?

Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. What is the market price?

a. An 8 ½%, 25-year, $1,000 bond is presently selling at a yield-to-maturity (YTM) of 9 4%. Assuming annual interest payments, what should you pay for the bond? b. What should you pay if interest is paid semiannually? c. Instead of a 25-year bond, they decide to issue 15-year bonds with annual payments. What should you pay for this bond if the YTM is 9 4%? Explain the differences in prices changes for (3a) and (3c) in terms of maturity. d. You buy an 8%, 15-year, $1,000 bond that pays interest annually when it is selling with a YTM of 7%. Immediately after you buy the bond, the YTM increases to 9%. What was the percentage change in the price of the bond? A bond has a market price that exceeds its face value. What type of bond is this? Describe the relationship between the coupon rate and the YTM. е.