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- Calculate the YTM for the following bonds.a. A 12 percent, 20‐year bond with a current price of $975b. A 6 percent, 10‐year bond with a current price of $836c. A 9 percent, 8‐year bond with a current price of $714Assume that a $10,000.00 bond paying 8.5% interest is currently selling at 106. a. What is the current selling price of the bond?b. What is the current yield of this bond?An investor purchases a 15-year, $100,000 par value bond that pays semiannual interest of $4,000. If the semiannual market rate of interest is 5%, what is the current market value of the bond? $89,620.34 $100,000.00 $84,627.55 $79,568.15
- What is the current yield of a bond with a 6.55 percent, 22-year bond quoted at 52.000Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is * P1,560.00 P1,540.00 P1,440.00 P1,442.31The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 12 years until maturity. You can purchase the bond for $955. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 11 percent?
- A $1,000, 5%, 20-year annual-pay bond has a yield-to-maturity (YTM) of 6.5%. if the YTM remains unchanged, how much will the bond value increase over the next three years? A. $13.44 B. $13.62 C. $13.78 D. $13.96You have the following information regarding an annual bond. What is the modified duration of this bond? Payment $40 YTM 6.5% Maturity (in years) 19 Par value $1,000A bond pays $50,000 per year and has a face value of $500,000 at theend of 8 years when it has to be redeemed. If its current discounted priceis $390,000, what true interest could be earned on the bond? Ans. (14.9%)
- Stanley, Inc. issues 20-year $1,000 bonds that pay $80 annually. The market price for the bonds is $909. The market's required yield to maturity on a comparable-risk bond is 9 percent. a. What is the value of the bond to you? b. What happens to the value if the market's required yield to maturity on a comparable-risk bond (i) increases to 12 percent or (ii) decreases to 7 percent? c. Under which of the circumstances in part b should you purchase the bond?On January 31, 2022 you purchased a newly issued 5.6% coupon bond issued by the Dana Corporation for $1,023.56. The bond is noncallable and matures January 31, 2048. You decide to sell the bond April 30, 2023 when the bond’s yield to maturity was 4.82 percent. Based on a 30/360 day-count method, how much will you receive from the sale of the bond (including accrued interest)? Consider the December 31, 2022 and 2021 balance sheet for the Jasper Company and the income statement for the year ended December 31, 2022: JASPER COMPANY Balance Sheets as of December 31, 2022 and 2021 Assets 2022 2021 Cash $ 405 $310 Accounts receivable 3,055 2,640 Inventory 3,850 3,275 Property, plant, and equipment (net) 10,670 10,960 Total $17,980 $17,185 Liabilities and Stockholder’s Equity 2022 2021 Accounts payable $ 2,570 $ 2,720 Current portion of long-term debt payable 0 100…13. An investor purchases bonds with a face value of $100,000. Payment for thebonds includes (a) a premium (b) accrued interest rate and (c) brokeragefees. How would each of these charges be recorded and what dispositionwould ultimately be made of each of these charges??
