Jerry has an opportunity to buy a bond with a face value of $10,000 and a coupon rate of 14 percent, payable semiannually. a. If the bond matures in five years and Jerry can currently buy one for $4000, what is his IRR for this investment?
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- Jerry has an opportunity to buy a bond with a face value of $10,000 and a coupon rate of 13 percent, payable semiannually. a. If the bond matures in five years and Jerry can currently buy one for $3,500, what is his IRR for this investment? b. If his MARR for this type of investment is 20 percent, should he buy the bond?Consider a six-year, 10% coupon bond (yearly coupon payments) with a face value of $1000 that John bought for $950. (a). What is the yield to maturity of this bond? (b). Suppose after holding it for one year, (and receiving one coupon payment), John sells it for $1050. What is the return John got from holding this bond for one year?Jimmy has a bond with a $1,000 face value and a coupon rate of 8.25% paid semiannually. It has a five-year life. If investors are willing to accept a 12 percent rate of return on bonds of similar quality, what is the present value or worth of this bond? Show your work. What is the impact of paying interest semi-annually rather than annually? Explain.
- Bob uses 19481 to purchase a 10-year par-value bond (i.e. redeems at face-value). Coupons are paid out annually (end of the year) and each coupon is equal to 2% of the face-value of the bond. If each coupon payment is invested into an account that earns an effective annual interest rate of 2.4%, then what is the face-value of the bond if Bob realizes an overall yield of 3.36% per year effective over the 10 year period? Give your answer rounded to the nearest whole number (i.e. X).Linda wanted to invest in a bond issued by JoJo Ltd. The bond has $1,000 par value, matures in ten (8) years and has a coupon rate of 8.5%, with coupon paid semi-annually. What is the maximum price Linda should pay for the bond if her alternative is to invest in her friend's company who will guarantee a 10% pa return, compound semi-annually?A man was offered a bond with a face value of ₱1,000,000 which has interest of 8% per year payable semi –annually and due in 10 years. If he wants to earn 6% semi –annually, how much must he pay the bond? Solve and show the solution.
- Tim has an opportunity to buy a $1,000 par value bond with a coupon rate of 7% and a maturity of 5 years. If Tim requires a 9% return on his investments, what is the most he would pay for this bond?If Rafael wants to earn $1700 from his bond investments—all 2-year bonds with a 4.6% annual payout (coupon) rate—how much money should he invest? Round your answer to the nearest dollar.Andrew is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 5.22 percent. If these bonds have a market price of $970.000 what yield to maturity can he expect to earn?
- The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually,and they will mature in 7 years. Your required rate of return for such an investmentis 10% annually.i) How much should you pay for a $1,000 ARA Corporation bond?ii) If you are given RM90,000, how many units of bond can you purchase?iii) What is the yearly interest income for this bond if I purchase it with RM90,000?iv) You plan to reinvest the coupon interest at 12% rate of return per annum. Calculate the value of the reinvestment, what is the figure will you get at the end of 7th years with your principle 2) Find the duration of the bond with the given information.Face value = RM1000Maturity = 6 yearsCoupon = 5%Bond value = RM1020 3) Recent dividend distributed RM1. Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After that, dividends will increase at a rate of 5% per year indefinitely. If the required return is 20%, calculate the stock. 4) Capital Bhd. just paid a…David Davis just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Pharoah Corp. that pays an annual coupon rate of 6.0 percent. If the current market rate is 10.00 percent, what is the maximum amount David should be willing to pay for this bond?Carol plans to invest in a 12 year bond issued by Iris Ltd that pays a coupon of 4.8 percent. Coupon payments are made semi-annually. If the current market rate is 6.4 percent, what is the maximum amount Carol should be willing to pay for this bond? Assume it has a par value of $1000.