Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. What was the price of this bond when it was issued?
Q: At the beginning of the year, you bought a $1,000 par value corporate bond with a 6 percent annual…
A: par = $1000 coupon rate = 6% n= 10 year r=8%
Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…
A: The formula to calculate price of bond is given below,
Q: A corporate bond has a face value of $1 000, a coupon rate of interest of 10.5% per annum, payable…
A: i. Coupon amount = Face value * Coupon rate Coupon amount = $1000 * 10.5%/2 Coupon amount = $52.50
Q: ABC Motors' bonds have 19 years remaining to maturity. Interest is paid semi-annually, they have a…
A: Data given:: Par Value = $1,000 Coupon interest rate = 5% (paid semi-annually) = 5%/2 = 2.5% = 0.025…
Q: Volbeat Corporation has bonds on the market with 30 years to maturity, a YTM of 6.2%, and a current…
A: Using excel PMT function
Q: A firm has a bond issue with face value of $1,000, a 7% coupon rate, and nine years to maturity. The…
A: The price of the bond (PV) is $1,067.89. The face value of the bond (FV) is $1,000. The maturity…
Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…
A: Par value of bond (FV) = $1000 Coupon rate = 7.9% Coupon amount (C) = 1000*0.079 = $79 Years to…
Q: There is a freshly issued 10 year inflation-linked bond with a face value of $1,000. Inflation in…
A: In case of Zero coupon bond no coupon shall be paid during the life of the bond. Therefore,…
Q: Bigbie Corp issued a five-year bond a year ago with a coupon of 8 percent. The bond pays interest…
A: Bond price is basically the net discounted value of the bond's future cash flow. It denotes the…
Q: . A corporate bond has a face value of P1,000 and pays a P50 coupon every six months. The bond…
A: You have asked a question with multiple parts. As a result, we will solve first 3 parts for you as…
Q: what is the value of the bond.
A: Bond: It is a debt instrument issued by the firm to raise capital from the investors. The…
Q: Palmer Products has outstanding bonds with an annual 8 percent coupon. The bonds have a par value of…
A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…
Q: Company Prestwood has issued bonds that have a 10% coupon rate, payable annually. The bonds mature…
A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…
Q: Renfro Rentals has issued bonds that have a 5% coupon rate, payable annually. The bonds mature in 17…
A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…
Q: A bond with a $20,000 face value has a 4.5% coupon and a 10-year maturity. Calculate the total of…
A: The formula concept is:
Q: Two years ago, ABC issued a 12-year bond with an annual coupon rate of 6% at par. If its current…
A: We require to calculate the Price of ABC bond today. Please note that it is mentioned in the…
Q: Five years ago, Thompson Tarps Inc. issued twenty-five-year 10% annual coupon bonds with a $1,000…
A: Price of the bond is present value of all future cash flows Current yield = coupon payment /market…
Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…
A: The issue price of the bond can be determined using its face value, coupon payment, yield to…
Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…
A: Face value of bond = $1000 Years to maturity = 10 Years Number of coupon payments = 10 Coupon rate…
Q: A 10-year Treasury note has a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based…
A: A treasury note is a kind of debt security issued by the US government that provides a fixed coupon.
Q: Pfizer Manufacturing just issued a bond with a $1,000 face value and a coupon rat of 8%. If the bond…
A: Face value = $1000 Coupon rate = 8% Annual coupon amount (C) = 1000*0.08 = $80 Years to maturity (n)…
Q: Suppose that a company issues $10000 face value discount bond maturing in one year.What is the price…
A: The bond is a fixed-income debt security. The current price of the bond is the discounted value at a…
Q: Suppose that five years ago a corporation issued a 9-year bond with a coupon rate of 6.50% and the…
A: Bond price With coupon payment (C), period (n), yield (r) and face or par value (F), the bond price…
Q: Crane Corp is issuing a 10-year bond with a coupon rate of 11 percent. The interest rate for similar…
A: Computation:
Q: A bond has a face value of $1,000, an annual coupon rate of 7 percent, yield to maturity of 10…
A: given, face value = $1000 coupon = 7% YTM = 10% years to maturity = 20
Q: A bond par value is $2,000 and the coupon rate is 6 percent. The bond price was $1,946.61 at the…
A: Par value = $ 2000 Coupon rate = 6% Coupon amount = 2000*0.06 = $ 120 Beginning price = $ 1946.61…
Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…
A: The market value of a bond is the price at which you could sell it to another investor before it…
Q: Suppose a 5-year, $1,000 bond with annual coupons has a price of $930 and a yield to maturity of 6%.…
A: A bond is a financial instrument that is issued by many companies and governments to raise…
Q: ABC Corp issued a bond with a maturity of 12 years. It has a 9 percent annual coupon, a yield to…
A: Face value (FV) = P1000 Coupon rate = 9% Yield to maturity (r) = 8% Years to maturity (n) = 12 Years…
Q: Nungesser Corporation has issued bonds that have a 9 percent coupon rate, payable semiannually. The…
A: This question require us to compute the price of the bonds from below given details: Coupon rate =…
Q: A 28-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.25% (2.625% of face…
A: Par value of bond = $ 1000 Coupon rate = 5.25% Semi annual coupon amount = 1000*2.625% = $ 26.50…
Q: price
A: The above problem can be solved using the PV function in the excel as follows: PV(rate, n, pmt, FV)
Q: The nominal rate of return is % earned by an investor in a bond that was purchased for $901, has an…
A: Given information: Purchase price : $901 Selling price : $1031 Face value : $1,000 Annual coupon :…
Q: Consider a 8-year corporate bond issued by Vandalay Industries. The bond has a face value of $1,000,…
A: Bond price refers to the right price of a bond which is also called as the intrinsic value of the…
Q: Assume that a bond will make payments every six months as shown on the following timeline (using…
A: Bond: The bond is a debt obligation under which the borrower of the debt is obliged to pay the…
Q: suppose a company issues $10,000 face value discount bond maturing in one year What's the price of…
A: Discount Bond is sold at price below par value with no interest payments and difference between…
Q: A twenty-year government bond with a face value of 120$ makes annual coupon payments of 6% and…
A: A bond is a fixed-income security that reflects a lender's loan to a borrower.
Q: Today, a bond has a coupon rate of 12.1%, par value of $1,000, YTM of 8.20%, and semi-annual coupons…
A: The rate of return that represents the current profitability of the bond is known as the current…
Q: GAMA Corp has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8…
A: Answer and calculations are given below
Q: Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a…
A: Bond is a debt instrument that pays regular interest and repays the principal at maturity. The price…
Q: Lincoln Park Co. has a bond outstanding with a coupon rate of 5.34 percent and semiannual payments.…
A: A bond is a debt instrument that pays interest payments periodically as per the predetermined coupon…
Q: The corporation has issued a bond which has a P1,000 par value and a 15% annual coupon interest…
A: Solution Coupon Interest (C) = 1000*15% = 150 n = 10 periods F = 1000 P = 1250
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Ruiz Company issued bonds on January 1 and has provided the relevant information. The Controller has asked you to calculate the bond selling price given two different market interest rates using the Present Value Tables. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, “=C3” was entered, the formula would output the result from cell C3, or $500,000 in this example. Multi-Tab Cell Reference: Allows you to refer to data from another cell in a separate tab in the worksheet. When using the multi-tab cell reference, type the equal sign first, then click on the other tab and then click on the cell you want to reference. The syntax of a multi-tab cell reference looks different than a normal cell reference, since it includes the tab name surrounded by apostrophes and also an exclamation…Ruiz Company issued bonds on January 1 and has provided the relevant information. The Controller has asked you to calculate the bond selling price given two different market interest rates using the Present Value Tables. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, “=C3” was entered, the formula would output the result from cell C3, or $500,000 in this example. Multi-Tab Cell Reference: Allows you to refer to data from another cell in a separate tab in the worksheet. When using the multi-tab cell reference, type the equal sign first, then click on the other tab and then click on the cell you want to reference. The syntax of a multi-tab cell reference looks different than a normal cell reference, since it includes the tab name surrounded by apostrophes and also an exclamation…Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $700. a. In the table provided below, calculate and enter either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed below or the bond price at each of the interest yields shown. Instructions: Enter your answers in the gray-shaded cells. For bond prices, round your answers to the nearest hundred dollars. For interest yields, round your answers to 2 decimal places.
- All computations must be done and shown manually Question 4 Complete the following table and draw a graph showing how bond price for each bond changes over time as they move towards their maturity dates. Describe the relationship between bond prices and time remaining for maturity. Please include graph as per above information Years remaining to maturity BOND A Coupon. rate = 8% p.a. Market interest rate = 6% p.a. BOND B Coupon rate = 6% p.a. Market interest rate = 6% p.a. BOND C Coupon rate = 4% p.a. Market interest rate = 6% p.a. 10 9 8 7 6 5 4 3 2 1 0Suppose you looking at a certain bond whose current market price is $935. The bond has a 6.00% coupon rate, pays annual coupon payments and has a 12 year maturity. Assume also that the current open market YTM is 7.00%. Based upon this information, answer the following questions. [3 parts] Show all work. Clearly label your answers for Part A, Part B, and Part C. Carry all calculations out to four (4) decimal places (except dollars and cents). Highlight in bold your answer. a) Based upon the bond’s features, determine what the bond’s current price ($) should be. (Use the present value method to determine the price) b) Based upon your calculated price in Part 1, is the open market price of the bond correct? If the bond is over/under priced, by how much is the bond mispriced? c) Based strictly upon your answer in part 2, would you buy the bond? Explain your answer.Assume coupons are paid annually. Here are the prices of three bonds with 10 year maturities. Assume face value is $100. Bond Coupon a. What is the yield to maturity of each bond? b. What is the duration of each bond? Complete this question by entering your answers in the tabs below. Required A Required B What is the duration of each bond? Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
- numerical answers should be calculated to at least two decimal places. Face value of bonds is taken as $100. assume coupon payments are paid once a year. Bond A: term to maturity=10 years, coupon rate = 9.75%, current price = $160.55. Find the current yield and yield to maturity of Bond A. Bond B: term to maturity-5 years, coupon rate = 11.25%, yield to maturity -2.35% p.a. Find the current price of Bond B. From your answer, what do say about this price when compared with the face value of the bond?Assume that a bond will make payments every six months as shown on the following timeline (using six- month periods): Period Cash Flows a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? $19.36 2 $19.36 CHE a. What is the maturity of the bond (in years)? The maturity is years. (Round to the nearest integer.) 19 $19.36 20 $19.36+ $1,000Assume that the risk free rate is equal to 0.04. The corporate bond rate for a risky bond is 0.11. Assume a recovery rate of 0.33. All rates in this problem are stated as decimals. Using the precise calculation formula, calculate λ , the probability of default. Round your answer to three decimal places, and state as a decimal. Please answer fast i give you upvote.
- Show all workings. Complete the following table and draw a graph showing how bond pricefor each bond changes over time as they move towards their maturitydates. Describe the relationship between bond prices and timeremaining for maturity.YearsreminingtomaturityBOND ACoupon rate = 8% p.a.Market interest rate =6% p.a.BOND BCoupon rate = 6% p.a.Market interest rate =6% p.a.BOND CCoupon rate = 4% p.a.Market interest rate =6% p.a.109876543210Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): Period 1 2 29 30 Cash Flows $20.37 $20.37 $20.37 $20.37 + $1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?The following table summarizes prices of various default-free zero-coupon bonds ($100 face value): (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) 1 2 3 4 5 Price (per $100 face value) $95.51 $91.05 $86.38 $81.65 $76.51 a. Compute the yield to maturity for each bond. b. Plot the zero-coupon yield curve (for the first five years). c. Is the yield curve upward sloping, downward sloping, or flat? Note: Assume annual compounding. Question content area bottom Part 1 a. Compute the yield to maturity for each bond. The yield on the 1-year bond is enter your response here%. (Round to two decimal places.)