Fifteen years ago your grandfather purchased for you a 25-year $1,000 bond with a coupon rate of 12 percent. You now wish to sell the bond and read that yields are 9 percent. What price should you receive for the 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.

eBook Problem 13-01 A $1,000 bond has a coupon of 9 percent and matures after twelve years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 10 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   What would be the price if comparable debt yields 10 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   Why are the prices different in a and b?The price of the bond in a is  than the price of the bond in b as the principal payment of the bond in a is  than the principal payment of the bond in b (in time). What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after twelve years: CY:   %YTM:   % The bond matures after six years: CY:   %YTM:   %

Check My Work eBook Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 8%. a. What is the yield to maturity at a current market price of 1. $819? Round your answer to two decimal places. % 2. $1,085? Round your answer to two decimal places. % b. Would you pay $819 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13%? I. You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond. II. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return. III. You would buy the bond as long as the yield to maturity at this price is less than your required rate of return. IV. You would buy the bond as long as the yield to maturity at this price equals your required rate of return. V. You would not buy the bond as long as the yield to maturity at…

Check My Work eBook Problem Walk-Through Madsen Motors's bonds have 11 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10%, and the yield to maturity is 13%. What is the bond's current market price? Round your answer to the nearest cent. 2$

eBook Ten years ago the Templeton Company issued 29-year bonds with a 9% annual coupon rate at their $1,000 par value. The bonds had a 6% call premium, with 5 years of call protection. Today Templeton called the bonds. a. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places. % b. Why the investor should or should not be happy that Templeton called them. I. Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they can now do so at higher interest rates. II. Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates. III. Since the bonds have been called, investors will receive a call premium…

eBook The interest rate on one-year Treasury bonds is 2.0 percent, the rate on two-year T-bonds is 1.9 percent, and the rate on three-year T-bonds is 1.8 percent. Using the expectations theory, compute the expected one-year interest rate in the second year (Year 2 only). Round your answer to one decimal place.  _____ % Using the expectations theory, compute the expected one-year interest rate in the third year (Year 3 only). Round your answer to one decimal place. _____  %

Problem 5.13 You want to buy some bonds that will have a value of $1,000 at the end of 8 years. The bonds pay 4.50 percent interest, how much should you pay for them today? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to the nearest penny.) Present value of bond Click if you would like to Show Work for this question: Open Show Work

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eBook Problem 13-05 Charlotte's Clothing issued a 8 percent bond with a maturity date of 16 years. Four years have passed and the bond is selling for $865. Assume that the bond pays interest annually. What is the current yield? Round your answer to two decimal places.   % What is the yield to maturity? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest whole number.   % If four years later the yield to maturity is 10 percent, what will be the price of the bond? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $

eBook Problem 7-22 You buy a mutual fund for $1,000. It annually distributes $40 for ten years, after which you sell the shares for $950. What is the annualized return on your investment? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest whole number.  %