LO4 The company intends to issue 20-year bonds with a face value of $1,000. The bonds carry a coupon rate of 9%, and interest is paid semiannually. On the issue date, the market interest rate for bonds issued by companies with similar risk is 12% compounded semiannually. Compute the market price of one bond on the date of issue.
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- A company is planning to issue perpetual, callable bonds with a coupon rate of 8% paid annually, and a par value of $1,000. The nominal interest rate on these bonds will be 9% for the next year. In one year, the nominal rate on the bonds will be either 10% with probability 0.6, or 8% with probability 0.4. The bonds are callable at $1200. Assuming the bonds are called if the interest rate decreases, what is the price of the callable bond today?Capex Inc. ssues a bond of $1,000 which pays interest semlannually at a coupon interest rate of 10%. The maturity of the bond is 30 years. Where should this bond be traded? O money market O forex market O capital market O commodities marketXYZ Co. is planning to issue stripped bonds with a face value of $100 and maturity of 10 years. What is the price of each stripped bond if the yield to maturity on similar bonds is 5.5% compounded semi-annually?
- The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and carry a coupon rate of 17.6 percent. Assume interest payments are made semiannually. How would your answer change if the required rate of return is 11.4 percent? (Round final answer to nearest dollar amount.) Present value $Type your answer hereXYZ issued a bond with a par value of P1,000. The bond pays an interest of P35 each quarter, and has a maturity of 10 years. How much should the investor be willing to pay for this bond, if they have nominal annual required rate of return is 12 percent compounded quarterly?Emma bonds will mature in eight years; the coupon rate of the bond is 6% paid semiannually. If the appropriate discount rate is 4%, what is the value of the bond? O a. $1073.25 O b. $1135.78 O. $1543.11 O d. $1293.02
- The brownstone corporation`s bond have 5 years remaining to maturity. Interest is paid annually, the bond have a GHC 1,000 par value, and the coupon interest is 9%.Required:a) What is the yield to maturity at a current price of (1) GHC 829 and (2) GHC 1,104?b) Would you pay GHC 829 for one of the bonds if you thought that the appropriate rate of interest is 12% .Explain your answer?Embun Berhad has a level-coupon bond with a 9% coupon rate and is paid annually. The bond has 20 years to maturity and a face value of RM1,000; similar bonds currently yield 7%. By prior agreement the company will skip the coupon interest payments in years 8, 9, and 10. These payments will be repaid, without interest, at maturity. What is the bond's current value?ZBD Inc is issuing a 20-year bond with a par value of $1,000. The bond will pay its holders a semi-annual coupon at a rate of 9.5% APR compounded semi-annually? What is the value of each coupon payment? Enter solution in dollars and cents, rounded to nearest cent.
- AC will be issuing bonds with a total face value of P10,000,000 at an issue price of P9,900,000. It will incur issuance cost of P600,000. The bonds have a term of 10 years and a coupon rate of 12% payable quarterly. If the tax rate is 30%, what is the effective cost of the bonds using the interpolation method? Use increments of 1%.The National Company’s bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a P1,000, face value; and the coupon interest rate is 9%. What is the estimated yield to maturity of the bonds at their current market price of P829? 14.80% 8.20% 10.86% 13.10%Graystone bonds have a maturity value of $1,000. The bonds carry a coupon rate of 12%. Interest is paid semiannually. The bonds will mature in 9 years. If the current market price is $976.50, What is the yield to maturity on the bond? b. What is the current yield on the bond? а.