ompensate the bondholders for getting the bond called, the issuer pays which of the following? Multiple Choice call premium coupon rate call feature original issue premium
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Q 24
To compensate the bondholders for getting the bond called, the issuer pays which of the following?
-
call premium
-
coupon rate
-
call feature
-
original issue premium
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- Acme Chemical, Inc. is a major manufacturer of chemical products for the agricultural ndustry, including pesticides, herbicides and other compounds. Due to a number of law suits elated to toxic wastes, Acme Chemical has recently experienced a market re-evaluation of its common stock. The firm also has a bond issue outstanding with 10 years to maturity and an annual coupon rate of 5 percent, with interest paid semi annually. The required nominal market annual interest rate on this bond has now risen to 10 percent due to the high risk level associated vith this firm. The bonds have a par or face value of $1,000. 1. Label each of the variables that you would use to determine the value of this bond in the market today: N (time periods until maturity) PMT (periodic interest payment) I per (periodic market interest rate) EV (future value to be received when the bond matures) = 2. Based on the variables that you have identified in Question #1, what is the market value. today (the present…INV3 1c If the liquidity preference theory is correct and you believe that the liquidity premium is 1 percent, what is the market expectation of the price that bond #4 will sell for next year? Bond # 1 2 3 4 1 - year strip bond 2- year strip bond 2-year 6% coupon bond 2-year 7% coupon bond Purchase Price for the bond) 950 907.03 1,009.23 1,027.69 Year 1 cash flow 1000 0 60 70 Year 2 cash flow 0 1000 1060 1070 Yield to Maturity 5% 5% 5.50% 5.50%Take quiz Exit Question 6 1 pts A bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date. callable O treasury coupon O puttable
- Q 18 Calculate the price of a 5.2 percent coupon bond with 18 years left to maturity and a market interest rate of 4.6 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.) BOND PRICE______ Is this a discount or premium bond?multiple choice premium bond discount bondProblem 2 - Reading bond tables Consider the following information from the Treasury bond table: Maturity Coupon Bid Asked 7/15/2021 2.1% 100.1600 100.2480 Asked Yield 1.3% a. What is the asked price of the bond that matures on 7/15/2021 and has a face value of $500? b. What is its coupon and current yield? c. What its the yield to maturity?QUESTION 16 Which bond would have the lowest interest rate risk? O 10-year, 3% coupon bond O 30-year, 5% coupon bond 10-year, 5% coupon bond O 30-year, 3% coupon bond
- PROBLEM 4 03/15/22 03/15/37 6.00% Settlement Date Maturity Date Coupon Rate Required Return (YTM) Face Value Frequency Basis 7.50% 1000 Semi-Annual Interest Payment (a) Given the Yield to Maturity (YTM); calculate the price of the bond using PRICE' function in Excel. (b) Calculate the "Duration" of the bond NOQ15 Regarding a bond's characteristics, which of the following is the principal loan amount that the borrower must repay? Multiple Choice maturity date time to maturity value par or face value call premiumQuestion 27 The face value of a bond is O a. The amount payable at the maturity date. O b. The amount used to calculate periodic interest payments. O c. The par value of the bond. O d. All of the above are correct. Moving to another question will save this response.
- estion list Question 7 K Refer to the bond listing table below to determine the daily high of the KFT.GX bond? Click the icon to view the bond listing from the table below. The daily high of the bond is % (Type an integer or a decimal.) Bond Listing from Wall Street Journal Online 1 2 3 4 5 6 7 8 9 Issuer Name CITIGROUP Symbol CHRY Coupon Maturity Rating Moody's/S&P/ Fitch Low 8.500% GENERAL GEHMX 5.500% May 2019 Jan 2020 A3/A/A+ Aa2/AA+/- - High 119.268 116.615 117.733 0.448 105.307 102.374 103.097 -0.028 Last Change ELECTRIC CAPITAL KRAFT FOODS KFT.GX 5.375% BANK OF BAC ICB 7.625% AMERICA ANHEUSER- BUD ID 5.375% BUSCH COMCAST CORP CMCD.GC 5.150% Mar 2020 Baa1/BBB+/BBB+ GOLDMAN GS.IAR 5.375% Mar 2020 A1/A/A+ Feb 2020 Baa2/BBB-/BBB- Jun 2019 A2/A/A+ Jan 2020 Baa2/BBB+/- - 106.081 101.999 103.411 0.687 113.172 111.839 112.847 0.283 104.693 104.061 104.526 -0.466 104.832 100.923 101.225 0.441 -0.592 99.750 95.636 96.642 SACHS GP BANK OF BAC IOP 4.500% Apr 2019 A2/A/A+ 101.750 99.288…Ch 11 Bonds and LTL1. When will bonds sell at a premium and discount? 2. Calculate bond interest under SL method.3. Impact of amortization of bond premium/discount on interest expense.4. Give an example journal entry for amortization of bond premium/discount.5. What is the Gain/loss on redemption of bonds? How do you calculate?6. Understand method of calculating PV of future cash flows -specifically for a bond.7. Why are bonds a popular source of financing?8. Contract rate (market rate) is used for what calculation purpose?Ch 10 SE: Corporations1. What are Rights possessed by common stockholders?2. What are a journal entries for stock issuance, cash dividend, stock dividend?3. What is the calculation of dividends when cumulative preferred stock is outstanding?4. Journal entries for treasury stock, financial statement presentation. Gain/loss on reissue of treasury stock.5. Prior period adjustment - example of, accounting for?6. define, describe, why use Stock split 7. Stock dividend –…Question 45: When a bond is sold for more than its face value, it is said to have been sold at _____. Answer: A. a premium B. a discount C. par D. a profit