A $14,149 par value bond whose coupon rate is 4.3% is purchased. If the investment represents a current yield of 4.5%, compute the bond's market price at the time of the purchase.
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Q) A $14,149 par value bond whose coupon rate is 4.3% is purchased. If the investment represents a current yield of 4.5%, compute the
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- Describe and differentiate between a bonds (a) current yield and (b) yield to maturity. Why are these yield measures important to the bond investor? Find the yield to maturity of a 20-year, 9 percent, 1,000 par value bond trading at a price of 850. Whats the current yield on this bond?Bond X has a 10% annual coupon, while Bond Y has a 8% annual coupon. Both bonds have the same maturity, a face value of $1,000, an 9% yield to maturity, and are noncallable. Which of the following statements is CORRECT? options: a) Bond X's capital gains yield is greater than Bond Y's capital gains yield. b) Bond X trades at a discount, whereas Bond Y trades at a premium. c) If the yield to maturity for both bonds immediately decreases to 7%, Bond X's bond will have a larger percentage increase in value. d) Bond X's current yield is greater than that of Bond Y. e) If the yield to maturity for both bonds remains at 9%, Bond X's price one year from now will be higher than it is today, but Bond Y's price one year from now will be lower than it is today.(a) Compute the market price (Vb) of the following bonds: (6)$1,000 par value, 10-yr maturity, and 8% coupon rate that is paid semi-annually? Assume the yield to maturity of 12%.$1,000 par value, 10-yr maturity, and 6% coupon rate that is paid semi-annually? Assume the yield to maturity of 12%.$1,000 par value, 10-yr maturity, and 8% coupon rate that is paid semi-annually? Assume the yield to maturity of 6%.(b) Based on your answers comment on the relationship (what happens to one variable when the other goes up/down) of (a) price with yield to maturity and (b) price with coupon rate. (4)
- Assume that the financial anagement corporation'shas 1000 par value bond had a 5.70% coupon, matures on May 15,2020, has a current price quote of 97.708 and has yield to maturity (YTM) of 6.034%. Answer the following question:1. What was the dollar price of bond?2. What is the bond's current yield?3. Is the bond selling at par, at discount or at a premium?4. Compare the bond's current yield calculated in part B to its YTM and explain why its differ. using excelCalculate the market conversion price for a convertible bond with par value of $4000, coupon rate of 5%, market price of $4000, a conversion ratio of 16, and current stock price of $202. 1. Assuming, the issuing company pays an annual dividend of $12 per share, what is the favorable income differential (yield advantage) per share for this bond? 2. Calculate the premium payback period for this bond.Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for $1,035.77. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.8% APR, what will be the bond's price?
- You are given the following information on two traded bonds making semi-annual coupon payments. Bond Face Value Coupon Maturity Price A $1,000 3% 12 years $850.10 B $1,000 10% 12 years $970.00 Calculate Yield to Maturity (YTM) for bonds A and B.The bond certificate with a par value P1,000,000 and a bond rate of 10 % was sold for P1,064, 176.58 . Calculate the yield that the investor obtained from his investment .A 10-year bond with a face value of $1,000 currently sells for $1,110. Which of the following statements is correct? Select one: a. The bond's current yield is equal to its coupon rate. b. The bond's coupon rate exceeds its current yield to maturity. c. None of the given answers is correct. d. The bond's yield to maturity is greater than its coupon rate.
- Assume that the financial anagement corporation's has 1000 par value bond had a 5.70% coupon, matures on May 15,2020, has a current price quote of 97.708 and has yield to maturity (YTM) of 6.034%. Answer the following question: 1. What was the dollar price of bond? 2. What is the bond's current yield? 3. Is the bond selling at par, at discount or at a premium?What is the yield to maturity on a 10-year, 9%annual coupon, $1,000 par value bond that sellsfor $887.00? That sells for $1,134.20? What does the fact that a bond sells at a discount orat a premium tell you about the relationshipbetween rdand the bond’s coupon rate?Suppose a 10-year, $1,000 bond with a 9% coupon rate and semiannual coupons is trading for a price of $955.79. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9% APR, what will the bond's price be?