Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A financial instrument that does not affect the ownership of the common shareholders or management of the company and issue with a fixed cost is term as the bonds.
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- Calculate the value of a bond given: Coupon Interest Payments (C) is $50; Capitalization Rate (K) is 17%; Years to Maturity (n) is 5; Par Value at Maturity (P) is $5,000; Compounded Semiannually. 2,539.49 OR 4539.49?arrow_forwardA bond with 16 years to maturity has an annual interest payment of $40. If the bond sells for its par value, what are the bond's current yield and yield to maturity? Round your answers to two decimal places. CY: % YTM: %arrow_forwardWhat is the duration of a 7-year zero-coupon bond with $1,000 par value and 3% YTM?arrow_forward
- Find the current yield (as a %) of a bond whose coupon rate is listed as 6.875 and currently selling at a premium of 106.875. Round to the nearest tenth percent. X % Neodlarrow_forwardA bond has a $1,000 par value, 11 years to maturity, a 12 percent annual coupon, and sells for $890. What is the bond’s yield to maturity (YTM)? a. 14.02% b. 12.00% c. 8.90% d. 14.75% e. 13.48%arrow_forwardConsider a bond with face value $20,000, coupon rate of 10%, YTM of 8%, and a maturity date 22 years from today. a. Assuming the new YTM for the bond holds, trace bond value, current yield, and capital gains yield over the lifetime of the bond. do all of this in excelarrow_forward
- Sunnyfax Publishing pays out all its earnings and has a share price of $37.00. In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 14%. If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision? O$45.87 $40.14 $68.81 $57.34arrow_forwardGiven the following spot rates, calculate the value of a 3-year, 4% annual-coupon bond. Spot rates: 1-year: 1% 2-year: 3% 3-year: 9% A. $880.38 B. $914.47 C. $961.28 D. $993.88arrow_forwardConsider a zero-coupon bond with a $100 face value and 10 years left until maturity. If the YTM of this bond is 5.1%, then the price of this bond is closest to: OA. $61.00 OB. $85.13 OC. $100.00 OD. $72.97 -- 4 Q Search Time Remarrow_forward
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