Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 83 basis points (0.83%). Your firm's five-year debt has a coupon rate of 6.3% with semi-annual coupons. You see that new five-year Treasury notes are being issued at par with a coupon rate of 1.9%. What should be the price of your outstanding five-year bonds per $100 face value. The price of the bond is $ (Round to the nearest cent.)

Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 83 basis points (0.83%). Your firm's five-year debt has a coupon rate of 6.3% with semi-annual coupons. You see that new five-year Treasury notes are being issued at par with a coupon rate of 1.9%. What should be the price of your outstanding five-year bonds per $100 face value. The price of the bond is $ (Round to the nearest cent.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A) Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 86 basis points (0.86%). Your firm's five-year debt has an annual coupon rate of 5.8%. You see that new five-year Treasury notes are being issued at par with an annual coupon rate of 2.2%. What should be the price of your outstanding five-year bonds? Assume $1,000 face value. Assuming a $1,000 face value, the price of the bond is $________. (Round to the nearest cent.)
Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 87 basis points (0.87%). Your firm's five-year debt has an annual coupon rate of 5.9%. You see that new five-year Treasury notes are being issued at par with an annual coupon rate of 1.7%. What should be the price of your outstanding five-year bonds? Assume $1,000 face value Assuming a $1,000 face value, the price of the bond is $ (Round to the nearest cent)
Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 89 basis points (0.89%). Your firm's five-year debt has a coupon rate of 6.2% with semi-annual coupons. You see that new five-year Treasury notes are being issued at par with a coupon rate of 1.8%. What should be the price of your outstanding five-year bonds per $100 face value. The price of the bond is $ (Round to the nearest cent.)
Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 87 basis points (0.87%). Your firm's five-year debt has a coupon rate of 5.7% with semi-annual coupons. You see that new five-year Treasury notes are being issued at par with a coupon rate of 2.4%. What should be the price of your outstanding five-year bonds per $100 face value. The price of the bond is?
Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 79 basis points (0.79%). Your firm's five-year has semi-annual coupons and a coupon rate of 6%. You see that new five-year Government of Canada bonds are being issued with a YTM of 2%. What should the price of your outstanding five-year bonds be? Assume a par value of $100. The price of your outstanding five-year bonds should be $ (Round to the nearest cent.)
Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 85 basis points (0.85%). Your firm's five- year debt has a coupon rate of 6.1% with semi-annual coupons. You see that new five-year Treasury notes are being issued at par with a coupon rate of 1.9%. What should be the price of your outstanding five-year bonds per $100 face value. The price of the bond is $ ... (Round to the nearest cent.)
Henderson's credit rating is BBB, and its outstanding 8% coupon bond have 15 years remaining until maturity. What is a fair price for these bonds if the credit spread for BBB bonds over Treasuries is 5.9%, and the yield on comparable Treasuries is 2.8% ? Use a par value of $1,000 and assume semi-annual coupon payments. Enter your answer as a positive number rounded to the nearest penny. Type your answer.
K Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 91 basis points (0.91%). Your firm's five-year has semi-annual coupons and a coupon rate of 6%. You see that new five-year Government of Canada bonds are being issued with a YTM of 2%. What should the price of your outstanding five-year bonds be? Assume a par value of $100. The price of your outstanding five-year bonds should be $ (Round to the nearest cent.)
YOUR BANK is thinking to issue a regular coupon bond (debenture) with following particulars: Maturity = 3 years, Coupon rate = 7.000%, Face value = $1,000.00, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for a bond with a similar default risk characteristics as one issued by YOUR BANK, is downward-upward sloping with the following interest rates per annum continuously compounded: Ro,1 = 8.000%, Ro,2 = 7.000%, R0,3 = 6.000%, R0,4 = 7.000%, and R0,5 = 7.500%, Where, the notation RoT is the spot-interest rate (at time t = 0) for T year maturity zero-coupon bond. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars? (Roundoff your answer to the nearest four decimal places, in order to get as close answer as possible in Canvas.)
problems should be solved by using a financial calculator or MS excel spreadsheet. Accordingly, you must show the values of all relevant time valu of money variables Columbus Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 30 years. Their nominal yield to maturity is 10%, they pay interest quarterlly, and they sell at a price of $980. What is the bond's annual coupon interest rate?
YOUR BANK is thinking to issue a regular coupon bond (debenture) with the following particulars: Maturity = 3 years, Coupon rate = 9%, Face value = $1,500, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for the bond similar to the one issued by YOUR BANK is flat and it is 7.500% per annum continuously compounded. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars?
Assume that the credit risk on a 5 year6 percent annual coupon corporate bond is represented by a 1.5 percent annual probability of default and a recovery rate of 25 percent. Assume that the government yield curve is flat at 2.5 percent. Calculate both the credit spread and credit valuation adjustment for the bond. INCLUDE DETAILED CALCULATION***

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