Two years ago, Company XYZ issued $100 million worth of ten-year bonds with a face value of $1,000 and a coupon rate of 5%. Coupon payments are made semi-annually. Two years ago, the market yield-to-maturity was 3% p.a. Due to the increased insecurity facing the industry, the market yield to maturity is now 7% p.a. a) Determine the market price of the bonds at issue based on an appropriate model.  b) Based on the yield-to-maturity today, assess whether the price has changed and proceed to determine its market price today.  c) Compare the results in (a) and (b) above and interpret the sensitivity of bond prices to maturity and yield to maturity.

Shanghai Textile Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 8% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond’s market price has fallen to $901.40. The capital gains yield last year was -9.86%.  What is the Approximate and Exact Yield to Maturity?

Wildhorse Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent and a yield to maturity of 6.0 percent. Assume face value is $1,000. Problem 8.30(a) Your answer is incorrect. Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.) Current price $ EA

Grossnickle Corporation issued 20-year, noncallable, 7.2% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 5.6%. What is the current price of the bonds, given that they now have 19 years to maturity?   a. $1,237.42     b. $1,184.25     c. $1,194.73     d. $1,230.68     e. $1,189.63

Baghiben

Charlie Corporation is a chemical company. The company issued an outstanding bond with a P100,000 par value at 15-year maturity date. The coupon rate is 8%, and interest is paid quarterly. The required nominal interest rate on this borrowings has now increased to 16 percent . What is the current market value of the bond? Rules in solving: a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.Example: ___x 2.123456789 or 22.12345678b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).Example semi-annual: 13%/2 =0.065c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers.Example: 824.59= 825

Occam Industrial Machines issued 145,000 zero coupon bonds six years ago. The bonds have a par value of $1,000 and originally had 30 years to maturity with a yield to maturity of 7 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.1 percent. Assume semiannual compounding for the bonds. What is the dollar price of the bonds? What is the market value of the company's debt? If the company has a $46 million market value of equity, what weight should it use for debt when calculating the cost of capital?

One year ago, a company issued 15-year, noncallable, 7.75% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 6.75%. What is the current price of the bonds?