Showbiz, Inc., has issued eight-year bonds with a coupon of 6.76 percent and semiannual coupon payments. The market’s required rate of return on such bonds is 7.35 percent. a)  What is the market price of these bonds? b)  If the above bond is callable after five years at an 11.1 percent premium on the face value, what is the expected return on this bond?

1. We have the opportunity to buy a 10-year (original term) bond with 7 years of semi-annual coupon payments remaining. The annual coupon rate is set at 5% ($25 semi-annual payment). If the current Yield to Maturity (prevailing market rate on comparable bonds) is approximately 6.5%, estimate the appropriate purchase price of the bond.

Kiss the Sky Enterprises has bonds on the market making annual payments, with 11 years to maturity, and selling for $960. At this price, the bonds yield 11.0 percent. What must the coupon rate be on the bonds?

KIC Inc. plans to issue $7.2 million of bonds with a coupon rate of 16 percent paid semiannually and 36 years to maturity. The current one-year market interest rate on these bonds is 15 percent. In one year, the interest rate on the bonds will be either 18 percent or 9 percent with equal probability. Assume investors are risk neutral. a. If the bonds are non-callable, what is the price of the bonds today? (Do not round Intermediate calculations. Enter the answer in dollars. Round the final answer to 2 decimal places. Omit $ sign in your response.) Price of the bonds $ $3,799,246.63 b. If the bonds are callable one year from today at $1,575, will their price be greater or less than the price you computed in part (a)? Greater than Less than c. If the bonds are callable one year from today at $1,575, what is the current price of the bond? (Do not round Intermediate calculations. Enter the answer in dollars. Round the final answer to 2 decimal places. Omit $ sign in your response.) Current…

Drongo Corporation's 3-year bonds currently yield 6.3 percent and have an inflation premium of 3.3%. The real risk-free rate of interest, r*, is 1.5 percent and is assumed to be constant. The maturity risk premium (MRP) is estimated to be 0.1% (t - 1), where t is equal to the time to maturity. The default risk and liquidity premiums for this company's bonds total 1.3 percent and are believed to be the same for all bonds issued by this company. If the average inflation rate is expected to be 3 percent for years 4, 5, and 6, what is the yield on a 6-year bond for Drongo Corporation? ○ 6.05% 6.45% 6.25% 5.85% 5.65%

Draiman Corporation has bonds on the market with 14.5 years to maturity, a YTM of 10.2 percent, a par value of $1,000, and a current price of $953. The bonds make semiannual payments. What must the coupon rate be on the bonds? (Hint: The coupon rate is always quoted as an annual rate! The coupon rate is calculated by adding up the total amount of payments in a year made by a bond, then dividing it by the face value of the bond.) Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Coupon rate %

A BBB-rated corporate bond has a yield to maturity of 13.2%. A U.S. Treasury security has a yield to maturity of 11.8%. These yields are quoted as APRS with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 12.7% and have 5 years to maturity. a. What is the price (expressed as a percentage of the face value) of the Treasury bond? b. What is the price (expressed as a percentage of the face value) of the BBB-rated corporate bond? c. What is the credit spread on the BBB bonds?

XYZ Corp.'s outstanding bonds have a $10,000 par value and they mature in 20 years. Their yield-to-maturity is 8%, annual coupon rate is 6%, and semi-annual compounding. (a) What's the bond's current market price? (b) What is the bond's current yield?

A corporate bond pays interest annually and has 3 years to maturity, a face value of $1,000 and a coupon rate of 3.7%. The bond's current price is $997.21. It is callable at a call price of $1,050 in one year.   What is the bond's yield to maturity? What is the bond's yield to call?

Volbeat Corporation has bonds on the market with 12.5 years to maturity, a YTM of 8 percent, and a current price of $980. The bond makes semiannual payments. What is the coupon rate?