a. Find the price for the bond in theYoars toData TableCoupon Rate11%Par Value$5,000.0010(Click on the following icon in order to copy its contents into a spreadsheet.)Years toMaturityYiold toMaturity11%PriceCoupon Rate11%Par Valuo$5.000.0010$1.000.0012%305%$1,000.009%3010%$1,000.0010%5.8%PrintDone a. Find the price for the bond in the following table: (Round to the nearest cent.)Years toMaturityYield toMaturityPricePar ValueCoupon Rate$5,000.0011%1011%%24

Bonds are the financial instruments that are used by companies for the purpose of raising funds and…

a. Find the price for the bona in uhe ToIOWng Yoars to Data Table Par Value Coupon Rate Maturity $5,000.00 11% 10 (Click on the following icon e in order to copy its contents into a spreadsheet.) Yoars to Maturity Yield to Maturity 11% 5% Price Par Valuo $5.000.00 $1,000.00 $1,000.00 Coupon Rato 11% 12% 9% 10% 10 30 30 10% $1,000.00 8% Print Done

a. Find the price for the bona in uhe ToIOWng Yoars to Data Table Par Value Coupon Rate Maturity $5,000.00 11% 10 (Click on the following icon e in order to copy its contents into a spreadsheet.) Yoars to Maturity Yield to Maturity 11% 5% Price Par Valuo $5.000.00 $1,000.00 $1,000.00 Coupon Rato 11% 12% 9% 10% 10 30 30 10% $1,000.00 8% Print Done

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6FPE

See similar textbooks

Similar questions

a. Reset the Data Section to its initial values. The price of this bond is 1,407,831. What would it be if there were only 9 or 8 years to maturity? Use the worksheet to compute the bond issue prices and enter them in the spaces provided. Bond issue price (9 years to maturity) __________________ Bond issue price (8 years to maturity) __________________ b. Compare these prices to the bond-carrying values found in the effective interest amortization schedule you originally printed out in requirement 3. Explain the similarity. c. Click the Chart sheet tab. The chart presented shows the price behavior of this bond based on years to maturity. Explain what effect years to maturity has on bond prices. Check your explanation by trying 8% as the effective rate (cell E10) and clicking the Chart sheet tab again. Also try 9%. When the assignment is complete, close the file without saving it again. Worksheet. Modify the BONDS3 worksheet to accommodate bonds with up to 20-year maturity. Use your new model to determine the issue price and amortization schedules of a 2,000,000, 18-year, 10% bond issued to yield 9%. Preview the printout to make sure that the worksheet will print neatly, and then print the worksheet. Save the completed file as BONDST. Hint: Expand both amortization schedules to 20 years. Expand the scratch pad to 20 years. Modify FORMULA1 in cell F17 to include the new ranges. Chart. Using the BONDS3 file, prepare a line chart that plots annual interest expense over the 10-year life of this bond under both the straight-line and effective interest methods. No Chart Data Table is needed. Put A23 to A32 in the Label format and then select A23 to A32, D23 to D32, and B40 to B49 as a collection. Enter all appropriate titles, legends, formats, and so forth. Enter your name somewhere on the chart. Save the file again as BONDS3. Print the chart.
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?
A bond with a face amount of $12,000 has a current price quote of 107.15. What is thebond’s price?a. $12,107.15b. $1,285.80c. $12,858.00d. $128,580
The following information about bonds A, B, C, and D are given. Assume that bond prices admit noarbitrage opportunities. What is the convexity of Bond D?Cash Flow at the end ofBond Price Year 1 Year 2 Year 3A 91 100 0 0B 86 0 100 0C 78 0 0 100D ? 5 5 105
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?
If the YTM on the following bonds are identical except, what is the price of bond B? Bond A Bond B Face value $1,000 $1,000 Semiannual coupon $45 $35 Years to maturity 20 20 Price $1,098.96 ?
The table below gives you some information with respect to bonds. Calculate the yield-to-maturity for all these bonds. Assume you hold till maturity what would you pick? Company Settlement Price Maturity Coupon YTM Morgan Stanley 2/10/2023 100.85 2/25/2023 3.75 ? Fidelity 2/10/2023 99.839 3/01/2023 0.375 ? Caterpillar 2/10/2023 100.00 3/01/2023 2.625 ? NextEra Energy 2/10/2023 99.889 3/01/2023 0.650 ? BNP Paribas 2/10/2023 100.08 3/03/2023 3.250 ?
If a P1,000 bond sells for P1,125, which of the following statements are correct? I. The market rate of interest is greater than the coupon rate on the bond. II. The coupon rate on the bond is greater than the market rate of interest. III. The coupon rate and the market rate are equal. IV. The bond sells at a premium. V. The bond sells at a discount. a. I and IV b. I and V c. II and IV d. II and V
Suppose you looking at a certain bond whose current market price is $935. The bond has a 6.00% coupon rate, pays annual coupon payments and has a 12 year maturity. Assume also that the current open market YTM is 7.00%. Based upon this information, answer the following questions. [3 parts] Show all work. Clearly label your answers for Part A, Part B, and Part C. Carry all calculations out to four (4) decimal places (except dollars and cents). Highlight in bold your answer. a) Based upon the bond’s features, determine what the bond’s current price ($) should be. (Use the present value method to determine the price) b) Based upon your calculated price in Part 1, is the open market price of the bond correct? If the bond is over/under priced, by how much is the bond mispriced? c) Based strictly upon your answer in part 2, would you buy the bond? Explain your answer.
Par Value Coupon Rate Years to Maturity Yield to Maturity Price 1,000.00 8%106% 1,000.006%108% 5,000.009%207% 5,000.0012%305% Bond prices. Price the bonds from the following table with annual coupon payments: Find the price for the bond in the following table
The following is a T-bond quote (par value $1,000) from the WSJ (8/31/2018). Use the information in the quote to answer the question. Maturity Coupon Bid Asked Chg Asked Yield 8/31/2,033 5.35 98:15 98:20 -14 ??? What is the purchase price of the bond? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Par Value Coupon Rate Years to Maturity Yield to Maturity Price 5,000.00 11%108% 1,000.005%305% 1,000.0012%510% 1,000.009%59% Bond prices. Price the bonds from the following table with semiannual coupon payments. Find the price for the bond in the following table