mdc bulids and maintainsfreeway accross malaysia. theh have an outstanding issue of rm100 par value bondswiht a coupon an 5 percent copuon rate. the issue pays interest annually and has 12 yrs remaingto it maturirty 1) If bonds of similar risk are currenty earnig a 4% ratre of return, how much should mdc bond seel for today 2) describe the two posibble reason why the rate on similar risk bonf is below the coupon rate in MDC bond 3) if the required return were 10% instead of 4 % what would the current value of MDC bond be .contract this finding in part 1) and discusss

mdc bulids and maintainsfreeway accross malaysia. theh have an outstanding issue of rm100 par value bondswiht a coupon an 5 percent copuon rate. the issue pays interest annually and has 12 yrs remaingto it maturirty 1) If bonds of similar risk are currenty earnig a 4% ratre of return, how much should mdc bond seel for today 2) describe the two posibble reason why the rate on similar risk bonf is below the coupon rate in MDC bond 3) if the required return were 10% instead of 4 % what would the current value of MDC bond be .contract this finding in part 1) and discusss

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 10P

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Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?
Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
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Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is $1,185. The bonds may be called in 5 years at 109% of face value (Call price=$1,090). a. What is the yield to maturity? b. What is the yield to call if they are called in 5 years? c. Which yield might investors expect to earn on these bonds? Why? d. The bond’s indenture indicates that the call provision gives the firm the right to call the bonds at the end of each year beginning in Year 5. In Year 5, the bonds may be called at 109% of face value; but in each of the next 4 years, the call percentage will decline by 1%.Thus, in Year 6, they may be called at 108% of face value; in Year 7, they may be called at 107% of face value; and so forth. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firmto call the bonds?
Excellent Berhad has bonds on the market with 14.5 years to maturity, a YTM of 5.3%,a par value of RM1,000 and a current price of RM1,045. The bonds make semiannualpayments. What must the coupon rate be on these bonds? Using Financial calculator BA II
Excellent Berhad has bonds on the market with 14.5 years to maturity, a YTM of 5.3%,a par value of RM1,000 and a current price of RM1,045. The bonds make semiannualpayments. What must the coupon rate be on these bonds?
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A semiannual corporate bond has a face value of $1,000, a price of $785.24, a coupon rate of 9.5% and 28 years left to maturity. What is the YTM? SHOW WORK PV= PMT= N= FV= I/Y= coupon rate
I'm about 2% off when calculating YTM and YTC from what I'm supposed to be getting in excel. Here is the question: Thatcher Corporation's bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bond is $1,100. The bonds are callable in 5 years at a call price of $1,050. What is their yield to maturity? What is their yield to call? For the YTM I'm using the rate function in excel. Here is how it reads RATE(10, 80,-1100,100). I'm getting the answer of 6.6023% and I'm supposed to be getting 6.62% (according to the book. It's the same for the YTC. Here is how it reads RATE(5,80,-1100,1050). The answer I'm getting is 6.474% but I'm supposed to get 6.49%. We are not using Fair Value Bond with this problem. What am I doing wrong?
ACB Products has a bond issue outstanding with 8 years remaining to maturity, a coupon rate of 10 percent with interest paid annually, and a par value of $1,000. If the current market price of the bond issue is $814.45, what is the yield to maturity, rd. Question 6 Select one: a. 14% b. 16% c. 12% d. 15% e. 13%If you think you can sell an asset for $15,000 in eight (8) years and you think the appropriate discount rate is 5%, how much would you be willing to pay for the asset today? Question 7 Select one: a. $15,000 b. $10,153 c. $11,236 d. $15,771.00 e. None of the above