Intel recently issued semi-annual, 4.8% coupon bonds. The bond will mature in 3 years. The current yield-to-maturity for bonds like this is 2.9%. Assuming the par value is $1,000, what is the price of this bond?

Intel recently issued semi-annual, 4.8% coupon bonds. The bond will mature in 3 years. The current yield-to-maturity for bonds like this is 2.9%. Assuming the par value is $1,000, what is the price of this bond?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Graystone bonds have a maturity value of $1,000. The bonds carry a coupon rate of 12 percent.…

A: Yield to maturity:A financial measure called Yield to Maturity (YTM) evaluates the overall return…

Q: What is the duration of the following bond: $1,000 par value, 6% annual coupon, 4 years to maturity,…

A: Variables in the question:Par value=$1000Annual coupon=6% (assumed paid annually)N=4 yearsYTM=6.5%

Q: Violet Inc. bonds currently sell for P1,500 and the same bond was originally sold at P1,500. This…

A: Current price = P1500 Original price = P1500 Annual coupon payment = P37.50 Period = 5 Years

Q: Smiley Industrial Goods has $1,000 face value bonds on the market with semiannual interest payments,…

A: A bond is a kind of debt security issued by the government and private companies for raising funds…

Q: You purchase a bond with an invoice price of $1,090. The bond has a coupon rate of 8.4 percent, and…

A: The invoice price of the bond is the dirty price of the bond. The equation is as below: Invoice…

Q: Mertol Corporation has 7-year, 1000t par value bonds that make semiannual coupon payments. The…

A: Here, Par value of Bond is 1,000 Current Price of Bond is 673.99 YTM is 22.45% Maturity of Bond is 7…

Q: bond's price

A: Bonds are debt instruments that are issued by corporate entities and governments to raise funds.…

Q: Hood Corp bonds have 19 years remaining until maturity, a 7% coupon rate, and a YTM of 4.2%. What is…

A: Compound = semiannual = 2 Time = t = 19 * 2 = 38 Coupon rate = 7 / 2 = 3.5% Yield To maturity = ytm…

Q: Company RS’s bonds outstanding have a coupon rate of 6% and semiannual payments. If the YTM on this…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: You purchase a corporate bond on January 1, 2008. The bond has an 8% annual coupon (interest paid…

A: HOLDING PERIOD RETURN FORMULA: holding period return=p1+couponp0-1

Q: There is a freshly issued 10 year inflation-linked bond with a face value of $1,000. Inflation in…

A: In case of Zero coupon bond no coupon shall be paid during the life of the bond. Therefore,…

Q: Intel recently issued semi-annual, 4.8% coupon bonds. The bond will mature in 3 years. The current…

A: The objective of this question is to calculate the price of a semi-annual coupon bond issued by…

Q: The total face value amount of bonds that you must issue is $ (Round to the nearest cent.)

A: Zero-coupon bonds refers to a type of bond that bears zero coupon payments i.e. provides no interest…

Q: bond with exactly 28 years remaining until maturity with a par value of $1,000 and a coupon rate of…

A: Current yield shows how much is coupon payment of bond against the price of bond and it is related…

Q: An ordinary bond of AGL Corporation has an annual coupon rate of 8% and a face value of $1,000. The…

A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…

Q: Field Industries' outstanding bonds have a 25-year maturity and $1,000 par value. Their nominal…

A: The price of a bond is equal to the sum of the present value of coupon payments and the present…

Q: Callaghan Motors' bonds have 5 years remaining to maturity. Interest is paid annually, they have a…

A: The current price of a bond is the present value of its expected future cash flow which is…

Q: The 1-year spot rate is 6%, the 2-year spot rate is 7%. The Treasury plans to issue 2-year maturity…

A: Bond is a debt security that is issued by organizations to raise debt funds from public and…

Q: Bulldogs Inc. has Dog bonds outstanding with P1,500 face value and 8 years is remaining before its…

A: Given: Particulars Amount Face value(FV) 1500 Years 8 Current price 1750 Coupon rate 10%…

Q: You are interested in purchasing bonds that are currently priced at $1,250.59 and have 13 years to…

A: Yield to maturity is the minimum rate of return expected by the investor on the investment in the…

Q: Oscorp has just issued its Norman special long bond. The bonds have a maturity of 25 years, a coupon…

A: YTM refers to the yield to maturity. It is the rate at which a bond generates a return for its…

Q: d a bond. The 6-year bond has a face value of $1000, a yield-to-maturity of 14% APR compounded…

A: Price of bond is the present value of coupon payment and present value of the par value of bond…

Q: The company SML previously issued a series of 12-year bonds that pay annual coupons. The bonds have…

A: The current price of a bond is equal to the present value of coupon payments and the present value…

Q: Energy Supplies has a bond with 11 years remaining until maturity date. The outstanding value is…

A: The price of the bond is determined by evaluating the present value of coupon payments till the…

Q: Bank of America has a 5%, annual coupon bond that will mature in 19 years. The interest rate for…

A: Par value = $1,000Annual coupon rate = 5%Annual coupon amount = Par value *Annual coupon rate…

Q: Bulldogs Inc. has a P1,200 face value bond with 8 years until maturity. The bond possesses a…

A: We need to use RATE formula in excel to calculate yield to maturity. The formula is…

Q: pany XYZ has a bond with par value of $1,000 that will mature in 20 years. The bond pays coupon rate…

A: Bond price refers to the total of the present values of all anticipated coupon payments plus the…

Q: Oscorp has just issued its Norman Special Long Bond. The bonds have a maturity of 25 years, a coupon…

A: Current yield measures the annual expected return of bond. The current yield is calculated by…

Q: A bond with a 6% annual coupon matures in 5 years and has a price of $961. Compute the current…

A: Given data: annual coupon rate = 6% years to maturity = 5 price of bond = $961 face value of bond =…

Q: Apple Bond is currently sold for $1,200 with 10 years to the maturity. The current yield (CY) of…

A: The objective of this question is to find the coupon rate of the bond. The coupon rate is the annual…

Q: Apple Bond is currently sold for $1,200 with 10 years to the maturity. The current yield (CY) of…

A: The current yield of a bond is a measure of its annual interest income relative to its current…

Q: The bonds of CEPS Group sells for OMR 896.67. The yield to maturity is 11 percent and the maturity…

A: Computation of the annual coupon payments: Excel computations: Worksheet calculations:

Q: Schermer, Inc. just issued a $5000 par value bond. The bond, which matures exactly 23 years from…

A: Current bond price=Coupon*(1-(1+r)^(-n))/r + FV/(1+r)^n

Q: The bonds of CEPS Group sells for OMR 869.76. The yield to maturity is 9 percent and the maturity…

A: Note: Since, annual coupon rate is asked, I am assuming that the coupons are paid annually. Price of…

Q: Apple wants to issue bonds with $1,000 face value and 10 years to maturity. The bonds would pay…

A: YTM is also known as Yield to maturity. It is a capital budgeting techqniue which helps in decision…

Q: Showbiz, Inc., has issued eight-year bonds with a coupon of 5.78 percent and semiannual coupon…

A: This question has two parts: In part a we need to compute the market price of bond In part b we need…

Q: On the issue date, you bought a 15-year maturity, 6.55% semi-annual coupon bond. The bond then sold…

A: A bond refers to an instrument the issuing organization uses to raise debt capital from…

Q: Smithson Co.'s Class A bonds have 10 years to go until maturity. They have a $1,000 face value and…

A: In the given problem we require to compute the bond's yield to maturity.

Q: Maroon Two Inc. has just issued 10,000 coupon bonds with face value of $1,000, coupon rate of 9%,…

A: Bond price is defined as the present discounted value for the future cash stream, which used to be…

Q: CGJ Bicycles, Incorporated, is currently selling bonds with an annual coupon of 13 percent. The…

A: Price / Present Value can be calculated using PV function in excelPV (rate, nper, pmt, [Fv],…

Q: CCC Co issues a bond today that will pay a coupon of 8%, twice a year. The yield to maturity for…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Your company wants to raise $8.0 million by issuing 30-year zero-coupon bonds. If the yield to…

A: Solution:- Face value means the par value of which the bonds will be issued.

Q: You notice in the WSJ a bond that is currently selling in the market for $1,053 with a coupon of9%…

A: Market price of bond = $1,053 Coupon rate = 9% Par value = $1000 Annual coupon amount = Par…

Q: Ultra Air's bonds have a 11-year maturity, a 10% coupon, paid semiannually, and a par value of…

A: A bond is an instrument that represents the loan that is made by the investor to the company and…

Question

Intel recently issued semi-annual, 4.8% coupon bonds. The bond will mature in 3 years. The
current yield - to - maturity for bonds like this is 2.9%. Assuming the par value is $1,000, what
is the price of this bond?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Formula

VIEW

Step 2: calculation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Dynamic Systems has an outstanding bond that has a $1,000 par value and a 7 percent coupon rate. Interest is paid semiannually. The bond has 11 years remaining until it matures. Today the going interest rate is 10 percent, and it is expected to remain at this level for many years in the future. Compute the (a) current yield and (b) capital gains yield that the bond will generate this year.
Ytm
Morin Company's bonds mature in 3 years, have a par value of $1000, and make a semiannual coupon of 6%. The market requires an interest rate of 3.08% on these bonds. What is the bond's price?
A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with semi-annual payment, and yield to maturity (YTM) of 4.32%. Let’s assume that in 5 years, the YTM on this increases to 5.13%. What will the $price be for this bond in 5 years?
A bond that matures in 9years has a $1,000 par value. The annual coupon interest rate is 14 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. A. What would be the value of this bond if it paid interest annually? (Round to the nearest cent) B. What would be the value of this bond if it paid interest semiannually? (Round to the nearest two decimnal places)
Help me please
Your company wants to raise $7.5 million by issuing 10-year zero-coupon bonds. If the yield to maturity on the bonds will be 8% (annual compounded APR), what total face value amount of bonds must you issue? The total face value amount of bonds that you must issue is $ (Round to the nearest cent.)
Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075 and it sells for $1,180. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC What is the current yield? What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places.
Findlay company recently issued bonds with a 20-year maturity, a 7.5% semiannual coupon, and a par value of $1,000. The going interest rate (kd, rd) is 6.0%, based on semiannual compounding. What is the bond's price? Bond valuation related problems should be solved by using a financial calculator or MS excel spreadsheet. Accordingly, you must show the values of all relevant time valu of money variables
You are considering buying bonds in AZYX The bonds have a par value of 1.000 and mature in 12 years . The annual coupon rate is 13.0% and the coupon payments are annual The bonds are currently selling for $1,376.80 based on a yield- to-maturity of 8.0%What is the bond's expected capital gain /loss if the bonds are held until maturity ?
A corporate bond has 30 years left to maturity, a par value of $1,000, coupon rate of 7.5% with semi-annual payment, and yield to maturity (YTM) of 3.33%. Let’s assume that in 5 years, the YTM on this increases to 5.51%. What will the $price be for this bond in 5 years?

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS