McConnell Corporation has bonds on the market with 16.5 years to maturity, a YTM of 6.3 percent, a par value of $1,000, and a current price of $1,036. The bonds make semiannual payments. What must the coupon rate be on these bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %
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- 8. Jackson Corporation’s bonds have 12 years remaining o maturity. Interes tis paid annually the bonds have 1000 EUR par value, and the coupon interest rate is 10%. The bonds sell at a price of 875 EUR. What is their yield to maturity? 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.Bond J has a coupon rate of 5.3 percent. Bond K has a coupon rate of 15.3 percent. Both bonds have eleven years to maturity, a par value of $1,000, and a YTM of 11.6 percent, and both make semiannual payments. a. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If interest rates suddenly fall by 3 percent instead, what is the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)Bond J has a coupon rate of 5.8 percent. Bond K has a coupon rate of 15.8 percent. Both bonds have eleven years to maturity, a par value of $1,000, and a YTM of 12.6 percent, and both make semiannual payments. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If interest rates suddenly fall by 2 percent instead, what is the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Bill J Bill K a percentage change in price b percentage change in price
- Bond J has a coupon rate of 4.2 percent. Bond K has a coupon rate of 14.2 percent. Both bonds have ten years to maturity, a par value of $1,000, and a YTM of 9.4 percent, and both make semiannual payments. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If interest rates suddenly fall by 2 percent instead, what is the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Bond J Bond K a percentage change in price % % b percentage change in price % %8.4. Coupon Rates Rhiannon Corporation has bonds on the market with 11.5 years to maturity, a YTM of 6.8 percent, a par value of $1,000, and a current price of $1,055. The bonds make semiannual payments. What must the coupon rate be on these bonds?5. Virgina Corp.'s bonds currently sell for $960. They have a 6.35% annual coupon rate and a 20-year maturity, but they can be called in 5 years at $1,067.50. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels in the future. a. Under these conditions, what rate of return (YTM) should an investor expect to earn if he or she purchases these bonds? b. What is the importance of YTM?
- (4 points) How does the equation for valuing a bond change if semiannual payments are made? Find the value of a 10-year, semiannual payment, 10 percent coupon bond if nominal rd = 13%.2.2 Suppose a 10-year, 10 percent, semiannual coupon bond with a par value of R1 000 is currently selling for R1 135.90, producing a nominal yield to maturity of 8 percent. However, the bond can be called after 5 years for a price of R1 050.i) (3 points) What is the bond’s nominal yield to call?ii) (2 points) If you bought this bond, do you think you would be more likely to earn theYTM or the YTC? Why?2.3 You have been provided with the following options.a. A 10-year, R1000 face value, 10 percent coupon bond with semiannual interest payments.b. A 10-year, R1000 face value, 10 percent coupon bond with annual interest payments.c. A 10-year, R1000 face value, zero coupon bond. d. A 10-year R100 annuity.(3 points) Determine which one poses the highest price risk.2.4 (4 points) Which of these five statement is…Question 6 You hold a zero coupon bond when there is a sudden change in interest rates. It has 18 years to maturity. Yield to maturity is 0.055, and rates change by FALLING -0.008 overnight.By how much does your bond change in value as a percentage or decimal?(Zero coupon bonds assume semi-annual compounding.) 0.1601 0.1689 0.1508 0.1642 0.15568.1. Valuing Bonds What is the price of a 20-year, zero coupon bond paying $1,000 at maturity, assuming semiannual compounding, if the YTM is: 6 percent? 8 percent? 10 percent?