) Eight years ago, exactly, the Crimson Company issued a $50 million, 10-year, $1,000 par value, callable bond, with a 7% annual coupon rate, and a 5% call premium over par. With 2 years to go before the bond matures, Crimson is considering calling the bond because interest rates have suddenly decreased. If it decides to call the bond, and since it still needs the funding for the remaining 2 years, it will replace the bond with a 2-year bank loan of an equivalent amount ($50 million), with an annual interest rate of 4%. Interest would be paid at the end of each year, and the principal repaid at maturity. Calculate whether Crimson management would save by calling the bond and replacing it with the bank loan. Should it call its loan?

Uliana Company wants to issue new 16-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1,065, make semiannual payments, and mature in 16 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)   Please solve with financial calculator or HP 10b and show inputs. Please don't use excel.

Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

(Related to Checkpoint 9.3) (Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 22 years with an annual coupon rate of 7 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 10 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 11 percent. What will be the price of these bonds if they receive either an A or a AA rating? a. The price of the Pybus bonds if they receive a AA rating will be $ 735.06. (Round to the nearest cent.) b. The price of the Pybus bonds if they receive an A rating will be $ (Round to the nearest cent.)

GrowthSec Ltd has raised $10M in debt funding by issuing 100 5 year bonds with a face value of $100,000 each. The bonds pay semi-annual coupons at 6% p.a. If the yield to maturity is 7% p.a., what will be the price of each bond? If after one year the bond is trading at a premium, what must have happened to market interest rates? Why has this impacted the bond price?

ART Vandelay Inc. has two different bonds currently outstanding. Bond A has a face value of $40,000 and matures in 20 years. The bond makes no payment for the first 6 years, pays $2000 semiannually for the subsequent eight years, and finally $2500 semiannually for the last 6 years. Bond B also has a value of $40,000 and matures in 20 years. However, it makes no coupon payments over the life of the bond. If the stated annual interest rate is 12%, compounded semiannually, a. What is the current price of Bond A? b. What is the current price of Bond B?