Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a 5 year bond issued by Venice Corp. that pays an annual coupon rate of 5.5%. If the current market rate is 7.2%, what is the maximum amount Pierre should be willing to pay for this bond?
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Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a 5 year bond issued by Venice Corp. that pays an annual coupon rate of 5.5%. If the current market rate is 7.2%, what is the maximum amount Pierre should be willing to pay for this bond?
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- 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?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 of 4.08 percent. If the current market rate is 5.60 percent, what is the maximum amount Pierre should be willing to pay for this bond? (Round answer to 2 decimal places, e.g. 15.25.) Pierre should pay $_____________andra has just been given a $5000 one-year bong with a coupon rate of 7 percent per year. However, she needed the money now and is surpised to find that the market value of the bond has increased to $5200. What rate of return (interest) would a prospective buyer earn on this bond?
- Your friend recommends that you invest in a three-year bond issued by Toyota, Inc., that will pay annual coupons of 10 percent. Similar investments today will yield 6 percent. How much should you pay for the bond?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?Jason Allen just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Blossom Corp. that pays an annual coupon rate of 5.0 percent. If the current market rate is 8.50 percent, what is the maximum amount Jason should be willing to pay for this bond? (Round answer to 2 decimal places, e.g. 15.25.)
- If Rafael wants to earn $1300 from his bond investments—all 5-year bonds with a 4.2% annual payout (coupon) rate—how much money should he invest? Round your answer to the nearest dollar.$______________________________________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?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?
- Suppose that Jenna just bought a newly issued 15-year bond with a coupon rate equal to 7%. If Jenna sells the bond at the end of the year when the market price is $917, what would be the bond's yield to maturity? What return would she earn? What portion of the return represents capital gains and what portion represents the current yield?Jerry and his wife just purchased the U.S. Treasury bond, and they have annual income $300,950. The bond will pay a lump sum of $1,000 exactly 4 years from today. The nominal interest rate is 6%. If the coupon rate is 8%, and compounded semiannually, answer the following questions: How much should they pay for the bond price? As an alternative, someone suggests to buy a State of North Carolina bond with exactly the same term, which one should they choose, Treasury bond or Sate bond? Why? If the nominal rate goes up, how does that affect the bond price?Jimmy has a bond with a $1,000 face value and a coupon rate of 8.5% 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.