What is the value of a bond that matures in 5 years, has an annual coupon payment of OMR 110, and a par value of OMR 2,000? Assume a required rate of return of 9%.
Q: What is the current value of a 12-year bond with a coupon rate of 8% and with quarterly payments if…
A: Following details are given in the question : Coupon rate = 8% Time period = 12 years Coupon…
Q: Assume that a company issued a bond with $1,000 face value, 10% coupon rate, 20 years maturity, if…
A: Face Vale = 1000 Coupon = Coupon Rate × Face Value = 10 × 1000 = 100 Total Time Period = 20 years…
Q: Calculate the current yield of a bond with $1,000 face value, 7.50% coupon rate, quarterly coupon…
A: A bond is an instrument that represents the loan that is made by the investor to the company and…
Q: What is the current price of a 5 year bond that has a face value of £100, a yield to maturity of 4%…
A: The price of bond can be calculated as sum of present value of coupon and face value
Q: What is the semi-annual coupan bond's norminal yield to maturity (YTM), if the years to maturity is…
A: Bond is debt-instrument that is used by entities t raise debt funds from public-at-large. Bonds pay…
Q: What's the value to you of a $1,000 face-value bond with an 8% semi-annual coupon rate and 7 years…
A: Face value of the bond = $1,000 Semiannual coupon amount (C) = $40 (i.e. $1000 * 0.08 / 2)…
Q: You own a bond that has a par value of $1,000 and matures in 5 years. It pays a 5 percent annual…
A: This question require us to calculate the bond's expected rate of return.
Q: Consider a 5-year bond with a par value of $1,000 and an 9% annual coupon. If interest rates change…
A: Time Period = 5 years Par Value = 1000 Coupon = Coupon Rate × Par Value = 9%*1000 = 90 Interest Rate…
Q: What is the value of a bond that has a 10 percent coupon, pays interest semiannually, and has 10…
A: Coupon Rate (C)= 10% or 0.1 Time Period (n)= 10 Years Yield to Maturity(Y) = 12% or 0.12 No. of…
Q: Suppose the coupon rate is 10% issue at par $1000 and for 15 years. Let say the market interest rate…
A: Bonds are the debt instrument issued by an entity to fulfill its debt requirement from the market.…
Q: What is the formula use to calculate yeild to maturity on a 20 year coupon bond with a current yeild…
A: It can be solved using rate function in excel. Yield to maturity can be calculated by following…
Q: What is the current price of a $1,000 par value bond maturing in 9 years with a coupon rate of 8…
A: using the present value function in excel
Q: Find the selling price for a zero coupon bond with 8 years to maturity and a $100,000 maturity value…
A: A zero-Coupon Bond is a debt security that is traded at a deep discount instead of paying interest.
Q: Suppose you’ve purchased a 5-year bond with a face value of $1,000 and a coupon of 10% in the…
A: Bond is a long-term debt instrument used by entities to raise debt from public-at-large. Fixed…
Q: What is the approximate yield to maturity for a $1000 par value bond selling for $1,100 that matures…
A: Par value of bond (F) = $1000 Coupon rate = 10% Annual coupon amount (C) = Par value*Coupon rate…
Q: When the market yield is 5.1% , what is the current yield of a 10 year 5.1% quarterly coupon bond ?
A: A bond is a debt security issued by business entities or governments to raise borrowing funds for a…
Q: Calculate the convexity of a $1,000 par value bond, with a coupon rate of 9% that matures in 4 years…
A: given, r=10% n=4 coupon rate =9% par =1000
Q: How is a bond’s value determined? What is the value of a 10-year, $1,000 par value bond with a 10%…
A: Bond’s current value can be determined by computing the present value of the bond’s future interest…
Q: Compute the current price of a bond which matures in 40 years and has a required rate of return of…
A: The current price of the bond is equivalent to the sum of the present value of coupon payment and…
Q: What must be the price of a $2,000 bond with a 5.7% coupon rate, annual coupons, and 30 years to…
A: The price of a bond consists present value of all future coupon payments and the redemption…
Q: A bond has a par value of $100, a coupon rate of 10.75% and matures in 5 years. If interest is paid…
A: Face Value of Bond = $ 100 Coupon Rate = 10.75% Coupon Amount = $100 *10.75% = $ 10.75 Required Rate…
Q: What's the value to you of a $1,000 face-value bond with an 7% semi-annual coupon rate and 9 years…
A: Face value or maturity value (M) = $1,000 Semiannual coupon amount (C) = $35 ($1000 * 0.07 / 2)…
Q: What is the maximum price you will pay for a bond with a face value of $1,000 and a coupon rate of…
A: Bond value is the present value of all the cash flows a bond will generate in its lifetime assuming…
Q: Consider a coupon bond with a 5% coupon rate. It will mature in one year and its yield to maturity…
A: Price of a bond is inversely proportional to the interest rate. Data Given: FV= $100 (assumed)…
Q: If a $1,000 bond with a 4 percent coupon (paid annually) and a maturity date of ten years is selling…
A: A financial instrument that doesn’t affect the ownership of the common shareholders or management of…
Q: A 2-year bond with par value $1,000 making annual coupon payments of $100 is priced at $1,000. What…
A: The bond is selling at a price which is its par value. Thus, the yield to maturity equals the coupon…
Q: What is the duration of a 2-year bond that pays a coupon of 4% per annum? It has a face value of…
A: Duration is the period required for the bond holder to collect amount invested in the bond.
Q: Compute the current price of a bond which matures in 40 years and has a required rate of return of…
A: A financial instrument that does not affect the ownership of the common shareholders or management…
Q: A bond with a face value of P1,000 that will matures in 10 years. It pays a P50 coupon every year,…
A: Face Value = 1000 N = 10 Coupon = 50 Call period = 5 years Call Price = 1200 Current Yield on bond…
Q: What is the value of a 15-year, $1000 par value, 1.5% coupon bond with annual payment if the…
A: Bond valuation is a way to determine the theoretical fair value (or par value) of a particular bond.…
Q: You purchased a bond for 725. The bond has a coupon rate of 8 percent, which is paid semiannually.…
A: Expected rate of return is Yield to maturity. Data given: ( Assumed all figures are in $) i) Face…
Q: Assume a 10-year, $1,000 par value bond with a 10 percent annual coupon if its required rate of…
A: Bond value is the current worth of a bond on the basis of the present value of the bond expected…
Q: What's the value to you of a $1,000 face-value bond with an 12% semi-annual coupon rate and 7 years…
A: Given The face value of bond is $1000 Coupon rate is 12% Term to maturity is 7 years
Q: What is the current yield of a bond
A: The current yieldis the equal to the annual interest earned divided by the current price of the…
Q: What is the value of a 10 percent semi-annual coupon bond with a par value of $1,000 that matures in…
A: Given: Coupon rate =10% semi annual Face value =$1000Semiannual coupon payment…
Q: A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for $985.…
A: Yield to maturity (YTM) is the total return expected on the bond if the bold is held till maturity.…
Q: You purchase a bond with a coupon rate of 6.9 percent and a clean price of $905. Assume a par value…
A: A dirty price is a pricing quote, which is the cost of a bond that includes accrued interest based…
Q: What is the price of a 5-year bond with a nominal value of $100, a yield to maturity of 7% (with…
A: Nominal value (V) = $100 Yield to maturity (i) = 0.07 Coupon rate = 0.10 Annual coupon amount (C) =…
Q: Find the yield to maturity on a semi-annual coupon bond with a face value of P 1,000, a coupon rate…
A: Solution:- Yield to maturity is the rate of return earned by the bond holder, if he holds the bond…
Q: What is the value of a 10-year, $1,000 par value bond with a 10 percent annual coupon if its…
A: The value of a bond is the present value of the expected cash flows.
Q: What is the value of a 6%, five year bond with annual coupons and face value equal to $1,000, if the…
A: The Current price of the Bond is the present value of its expected future cash flow which is…
Q: What is the most we should pay for a bond with a par value of $1000, coupon rate of 4.2% paid…
A: The most that we should pay for a bond is its present value. Present value of a bond is essentially…
Q: What is the approximate yield to maturity of a 10% coupon rate, $1,000 par value bond that is…
A: Details given to us are : Par value of bond = $1000 Current price (present value) = $1250 Time…
Q: A bond a has a par value of P100, a coupon rate of 10.75% and matures in 5 years. If interest is…
A: Bonds Bonds refer to the fixed income instrument that is issued by the corporations or government in…
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
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- Suppose you purchase a ten-year bond with 12% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 10.64% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ number.) (Round to the nearest cent. Enter a cash outflow as a negative The total cash flow at time 4 (after the fourth coupon) is $. (Round to the nearest cent. Enter a cash outflow as a negative number.) b. What is the internal rate of return of your investment? The internal rate of return of your investment is %. (Round to two decimal…Consider a bond that has a face value of $1,000. The bond has a maturity of 25 years and pays coupons of 5.5% per annum. If the bond's required rate of return is 8.0% per annum nominal, and coupons are received semi-annually, what is the current market price of the bond?What is the market price of a redeemable (at par) bond, with a maturity date in 4 years’ time, and a coupon rate of 10%, if current cost of debt, Kd (return required or yield) is 8%?
- Suppose that you buy a two-year 8% bond at its face value. a. What will be your total nominal return over the two years if inflation is 3% in the first year and 5% in the second? b. What will be your total real return?Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.01% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ The total cash flow at time 4 (after the fourth coupon) is $ negative number.) b. What is the internal rate of return of your investment? (Round to the nearest cent. Enter a cash outflow as aSuppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for fouryears, and sell it immediately after receiving the fourth coupon. If the bond’s yield to maturitywas 5% when you purchased and sold the bond,a. What cash flows will you pay and receive from your investment in the bond per $100 face value?b. What is the internal rate of return of your investment?
- What are the cash flows generated at the end of five years 1,000 bond if interest rates 5%? What is the reinvestment income at the end of five years 1,000 bond if interest rates 5%? Suppose that the yield curve implies R = 1% annually. Then the duration of the Consol bond would be Suppose the annual coupon is 8.5%, the face value of the three years bond is $1,000, and the current yield to maturity (R) is also 8.5%. Compute the duration of the bond?Suppose you purchase a 10-year bond with 6.1 % annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.7 % when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $ 100 face value? b. What is the annual rate of return of your investment?A 25-year coupon bond pays an annual coupon of 5 and has a face value of100. If the current price is 100, what is the yield to maturity?
- Suppose you purchase a 10-year bond with 6.64% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.17% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) OA. Years Cash Flows O B. Years C. Years Cash Flows Cash Flows - $114.06 O D. Years 0 Cash Flows $107.42 0 0 - $111.26 0 $111.26 1 $6.64 1 $6.64 1 $6.64 1 $6.64 2 $6.64 2 + $6.64 2 + $6.64 2 + $6.64 3 $6.64 3 $6.64 3 $6.64 3 $6.64 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.) 4 $114.06 4 $107.42 4 $114.06 4…What is the value of a 15-year, $1000 par value, 1.5% coupon bond with annual payment if the required rate of return is 2.8%.Suppose you purchase a 10-year bond with 6.19% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.34% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A. Years 2 3 Cash Flows $106.46 $6.19 $6.19 $6.19 $110.46 B. Years 0 2 3 4 Cash Flows - $106.46 $6.19 $6.19 $6.19 $110.46 C. Years 0 1 2 3 4 Cash Flows $104.27 $6.19 $6.19 $6.19 $110.46 D. Years 0 2 3 4 + $6.19 $6.19 $6.19 $104.27 Cash Flows - $110.46 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.)