Last year, Kevin Thomas purchased a $1000 Campbell Manufacturing corporate bond with an annual interest rate of 7.25%. The bond's current market price is $770. Calculate the following. If necessary, round all answers to two decimal places. If necessary, refer to the list of financial formulas. 1. Annual interest: 2. Current yield: % X
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- Last year, Sam Morris purchased a $1000 Dynamic Electronics corporate bond with an annual interest rate of 6.5%. The bond's current market price is $900. Calculate the following. If necessary, round all answers to two decimal places. If necessary, refer to the list of financial formulas. 1. Annual interest: 2. Current yield:3. Assume you purchased a bond for $9,186. The bond pays $300 interest every six months. You sell the bond after 18 months for $10,000. Calculate the following: a. Income. b. Capital gain (or loss). c. Total return in dollars and as a percentage of the original investment. Review Only Click the icon to see the Worked Solution. a. The current income is $ (Round to the nearest dollar.) b. The capital gain (or loss) is $ (Enter a loss as a negative number and round to the nearest dollar.) c. The total return in dollars is $ (Round to the nearest dollar.) The total return as a percentage of the original investment is %. (Enter as a percentage and round to two decimal places.)You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 10 percent, which is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 25 years to maturity. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the price of the bonds based on semiannual analysis. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Bond price b. With 20 years to maturity, if yield to maturity goes down substantially to 8 percent, what will be the new price of the bonds? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) New bond price
- Suppose you purchase a T-bills that is 125 days from maturity for $9,765. The T-bills has a face value of $10,000.a. Calculate the T-bills’s quoted discount rate. b. Calculate the T-bills’s annualized rate.c. Who are the major issuers of and investors in money market securities?You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 9 percent, which is paid semiannually. The yield to maturity on the bonds is 8 percent annual interest. There are 15 years to maturity. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the price of the bonds based on semiannual analysis. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) b. With 10 years to maturity, if yield to maturity goes down substantially to 6 percent, what will be the new price of the bonds? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)Compute the selling price of 8%, 10-year bonds with a par value of $310,000 and semiannual interest payments. The annual market rate for these bonds is 10%. Use present value Table B.1 and Table B.3 in Appendix B. Note: Round all table values to 4 decimal places, and use the rounded table values in calculations.
- Cross Country Railroad Co. is about to issue $100,000 of 10-year bonds that pay a 5.5% annual interest rate, with interest payable semi-annually. The market interest rate is 5%. How much can Cross Country expect to receive for the sale of these bonds? To calculate, use (a) the present value tables, (b) a financial calculator, or (c) Excel function PV. (Unknown Rate) HQ Ltd. purchased a used truck from Trans Auto Sales Inc. HQ paid a $4,000 down payment and signed a note that calls for 36 payments of $1,033.34 at the end of each month. The stated rate of interest in the note is 4%. As an incentive for entering into the contract, Trans has agreed to forgive the first two payments under the lease.InstructionsWhat was the purchase price of the used truck excluding the incentive given? To calculate, use (1) a financial calculator or (2) Excel function PV.What effect, if any, does the forgiveness of the first two payments have on the purchase price of the truck?Calculate the present value of…Fold in the Cheese, Inc. is issuing $850000 of 8% 10-year bonds. These bonds will pay semi-annual interest payments. The market interest rate is currently 6%. Required: Compute what your bonds are worth. Round all calculations to 2 decimals. Record the sale of the bond with a journal entry. Record the journal entry for your first interest payment.Bonds issued by the Tyler Food chain have a par value of $1,000, are selling for $1,110, and have 20 years remaining to maturity. Annual interest payment is 14.5 percent ($145), paid semiannually. Compute the approximate yield to maturity. (Use a Financial calculator to arrive at the answers. Do the not round intermediate calculation. Round the final answer to 2 decimal places.) Approximate yield to maturity %
- ABC Company will issue $5,100,000 in 8%, 10-year bonds when the market rate of interest is 10%. Interest is paid semiannually. Required: Determine how much cash ABC Company will realize from the bond issue. Note: Use tables, Excel, or a financial calculator. Round your intermediate calculations to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Bond issue priceNovak Corporation issues $570,000 of 9% bonds that are due in 8 years and pay interest semi-annually. At the time of issue, the market rate for such bonds is 8%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Calculate the bonds' issue price by using (1) factor Tables A.2 and A.4, (2) a financial calculator, or (3) Excel function PV. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Issue price of bond $On July 1, 2012 you purchase a $10,000 par T-Note that matures in 5 years. The coupon rate is 8% and the price quote is 98:6. The last coupon payment was May 1, 2012 and the next payment is November 1, 2012 (184 days total). The accrued interest is A. $101.00. B. $50.54. C. $40.65. D. $132.61.