[EXCEL] Bond price: Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon rate of 5.5 percent. If the current market rate is 7.25 percent, what is the maximum amount Pierre should be willing to pay for this bond? Please use Excel.
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- A. you offered to buy a 4 year coupon corporate bond in the beginning of its 7th monthon its third year for $963.94. its face value is $1,000 and its coupon rate is 5.172% per annum, with coupon paid at the end of each quarter. Government bond rate now is 6.9%. a. is $963.94 a good price for you to buy it or not ? what is the fair price for the bond ? b. what is the yield if you buy at the price that you been offered ? c. if the government bond rate suddenly goes down to 4.7% what will be the new fair value of the bond ? B. the company just paid a $1.48 annual dividend and announced the plan to pay $1.54 next year . the dividend growth rate is expected to remain constant at the current level for the following 4 years and then settle at 3% per year . if you are planning to buy this stock in 2 years time , how much would you expect to pay for it if the required rate of return is 7% at the time you purchase ? ( use two decimal rounding )A. you are offered to buy a 4 year coupon bond in the beginning of its 7th month on its third year for $963.94. its face value is $1,000 and its coupon rate is 5.172% per annum, with coupon paid at the end of each quarter . government bond rate now is 6.9%. a. is $963.94 a good price for you to buy it or not ? what is the fair price for the bond ? b. what is the yield if you buy at the price that you have been offered ? c. if the government bond rate suddenly goes down to 4.7%, what will be the fair value of the bond ? B. the company just paid $1.48 annual dividend and announce the plns to pay $1.54 next year . the dividend growthrate is expected to remain constant at the current level for the following 4 years and then settle at 3% per year , if you are planning to buy this stock in 2 years time, how much would you expect to pay for it if the required rate of return is 7% at the time of your purchase ? ( use two deciaml rounding )You are offered to buy a 4-year coupon corporate bond in the beginning of its 7th monthon its third year for $963.94. Its face value is $1,000 and its coupon rate is 5.172% p.a.with coupon paid at the end of each quarter. Government bond rate now is 6.9%.(a) Is $963.94 a good price for you to buy it or not? What is the fair price for the bond?(b) What is the yield if you buy at the price that you have been offered?(c) If the government bond rate suddenly goes down to 4.7%, what will be the new fairvalue of the bond?B. The company just paid a $1.48 annual dividend and announced the plans to pay $1.54next year. The dividend growth rate is expected to remain constant at the current level forthe following 4 years and then settle at 3 percent per year. If you are planning to buy thisstock in two years’ time, how much would you expect to pay for it if the required rate ofreturn is 7 percent at the time of your purchase? (Use two decimal rounding)
- 26. Assume that you wish to purchase a 30-year bond that has a maturity value of P1,000 and a coupon interest rate of 9.5%, paid semiannually. If you require a 6.75% rate of return on this investment, what is the maximum price that you should be willing to pay for this bond? a. P1,352 b. P1,450 c. P1,111 d. P675The yield of the 10-year US Treasury bond is 1.20%. It is the risk-free rate. You workfor investment manager and your boss asks you to calculate the price of a 10-yearcorporate bond that yields 3.00% more than its risk-free rate and has a face value of$1,000. The fixed coupon of this corporate bond is 5.00%. Both bonds pay couponsannually.• What is the current price of the corporate bond?• Calculate the price of the bond if its yield increased by 1.00%.• Calculate the price of the bond if its yield decreased by 1.00%.• Please discuss the risk associated with this change in interest rates?Your client is considering the purchase of a bond that is currently selling for $1112.09. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 22 years to maturity, pays a coupon rate of 5.5% (payments made semi-annually), and a face value of $1000. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%)
- Ma1. Please give only typed answer. You are considering buying a municipal bond with a 10-year life, a 1,000 par value, and will pay a coupon of 4% annually. You have an opportunity to buy the bonds at original issue (e.g., full 10-year life). Assuming you require a 8% rate of return, how much should you pay for the bond (i.e., how much is it worth)?CASE2: A 10-year 10 percent semiannual coupon bond, with a par value of $1,000, may be called in 4 years at a call price of $1,160. The bond sells for $1,200. (Assume that the bond has just been issued.) What is the bond's yield to maturity? What is the bond's current yield? What is the bond's capital gain or loss yield? What is the bond's yield to call? How would the price of the bond be affected by changing interest rates? (Hint: Conduct a sensitivity analysis of price to changes in the yield to maturity, which is also the going market interest rate for the bond. Assume that the bond will be called if and only if the going rate of interest falls below the coupon rate. That is an oversimplification but assume it anyway for purposes of this problem.)The yield of the 10-year US Treasury bond is 1.20%. It is the risk-free rate. You work for investment manager and your boss asks you to calculate the price of a 10-year corporate bond that yields 3.00% more than its risk-free rate and has a face value of $1,000. The fixed coupon of this corporate bond is 5.00%. Both bonds pay coupons annually.• What is the current price of the corporate bond?• Calculate the price of the bond if its yield increased by 1.00%.• Calculate the price of the bond if its yield decreased by 1.00%.• Please discuss the risk associated with this change in interest rates
- The yield of the 10-year US Treasury bond is 1.20%. It is the risk-free rate. You work for investment manager and your boss asks you to calculate the price of a 10-year corporate bond that yields 3.00% more than its risk-free rate and has a face value of$1,000. The fixed coupon of this corporate bond is 5.00%. Both bonds pay coupons annually. • What is the current price of the corporate bond? • Calculate the price of the bond if its yield increased by 1.00%.• Calculate the price of the bond if its yield decreased by 1.00%. Please explain the process and show the calculations/formulas.[EXCEL] Zero coupon bonds: Diane Carter is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 9 percent. Assume annual coupon payments. What is the current value of this bond? Please use ExcelDon't use chatgpt.... I will 5 upvotes Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of ? 1000, 7 years to maturity, and a coupon rate of 8.8 percent paid annually. If the yield to maturity is 10.8 percent, what is the current price of the bond?
