Two 1000 dollar face value bonds are both redeemable at par, with the first having a redemption date 3 years prior to the redemption date of the second. Both are bought to yield 11.6 percent convertible semiannually. The first bond sells for 784.31 dollars and pays coupons at 7.9 precent convertible semiannually. The second bond pays coupons at 5.1 percent per half year. What is the price of the second bond? Answer= dollars.
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- (Valuing bonds) A 14-year, $1000 par value Fingen bond pays 9 percent interest annually. The market price of the bond is $1100, and the market's required yield to maturity on a comparable-risk bond is 10 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond?A Sunfish bond is paying 10 percent interest for 20 years on a semiannual basis. Assume interest rates in the market (yield to maturity) increase from 6 percent to 14 percent. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Enter all amounts as positive value. Round the final answers to 2 decimal places.) a. What is the bond price at 6 percent? Bond price $ b. What is the bond price at 14 percent? Bond price $ c. What would be the percentage return on an investment bought when rates were 6 percent and sold when rates are 14 percent? Return on investment % (Click to select) profit loss (Type answer only)Bond A has the following terms: Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: Ten years Bond B has the following terms: Coupon rate of interest (paid annually): 6 percent Principal: $1,000 Term to maturity: Ten years What should be the price of each bond if interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after three years have elapsed, interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after ten years have elapsed, interest rate is 9 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $
- Bond A has the following terms: Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: Ten years Bond B has the following terms: Coupon rate of interest (paid annually): 6 percent Principal: $1,000 Term to maturity: Ten years What should be the price of each bond if interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after four years have elapsed, interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after ten years have elapsed, interest rate is 9 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $A bond has the following features: Coupon rate of interest (paid annually): 6 percent Principal: $1,000 Term to maturity: 12 years What will the holder receive when the bond matures? Principal or All coupon payments? If the current rate of interest on comparable debt is 9 percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ Would you expect the firm to call this bond? Why? -Yes or No, since the bond is selling for a discount or premium? If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for twelve years if the funds earn 9 percent annually and there is $120 million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar. $A $1,000 par value bond has a current price of $801.36 and a maturity value of $1,000 and matures in 5 years. If interest is paid semiannually and the bond is priced to yield 8%, what is the bond's annual coupon rate? The bond's annual coupon rate is%. (Round to three decimal places.)
- An investor must choose between two bonds: Bond A pays $102 annual interest and has a market value of $890. It has 10 years to maturity. Bond B pays $88 annual interest and has a market value of $800. It has five years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) b. Which bond should she select based on your answers to part a? multiple choice 1 Bond A Bond B c. A drawback of current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond A is 12.10 percent. What is the approximate yield to maturity on Bond B? The exact yield to maturity? (Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as…Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 12 years remaining to maturity, and have a required rate of return of 11.5 percent. a. The bond has a 7.8 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g. 32.16)) b. The bond has a 9.8 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g.. 32.16)) c. The bond has a 11.5 percent coupon rate. (Do not round intermediate calculations.) a. Fair present value b. Fair present value c. Fair present valueA $1,000 face value bond is currently quoted at 100.8. The bond pays semiannual payments of $22.50 each and matures in six years. What is the coupon rate?
- A 8-year bond with a face value of 1000 dollars earns interest at 9.9 percent convertible semiannually. If the bond sells for 1096.14 dollars to yield an investor 7.8 percent convertible semiannually, what is the redemption value? Answer = dollars.Harold Reese must choose between two bonds: Bond X pays $92 annual interest and has a market value of $895. It has 10 years to maturity. Bond Z pays $82 annual interest and has a market value of $920. It has four years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Bond X Bond Z Bond X O Bond Z Current Yield b. Which bond should he select based on your answers to part a? % % c. A drawback of current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond X is 10.94 percent. What is the approximate yield to maturity on Bond Z? The exact yield to maturity? (Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent…A 10-year bond earns interest at 10.2 percent convertible semiannually and has a yield rate of 7.4 percent convertible semiannually. If the book value immediately after the 7th coupon payment is 1071.75 dollars, and the book value immediately after the 11th coupon payment is 1019.48 dollars, what is the face value? Note: Don't assume that the face value and redemption value are the same. Answer= dollars.