The Altoona Company issued a 25-year bond 5 years ago with a face value of $1,000.  The bond pays interest semiannually at a 10% annual rate.  What is the bond's price today if the interest rate on comparable new issues is 12%? What is the price today if the interest rate is 8%? Explain the results of parts a and b in terms of opportunities available to investors. What is the price today if the interest rate is 10%? Comment on the answer to part d.

Q: suppose that five years ago Cisco Systems sold a 15-year bond issue that had a $1,000 par value and…

A: Part (a): Computation of present value of bond: Answer: Present value of bond is $813.07

Q: A company issued a bond a few years ago that has a face value equal to $1,000 and pays investors $30…

A: Given information: Par value : $1000 Semi-annual coupon payment : $30 time to maturity : 8 years…

Q: Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of…

A: If the bond is called one year from today at a call price of $1080, then the price of the bond today…

Q: A tax-exempt bond was recently issued at an annual 8% coupon rate and matures 20 years from today.…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: William Motors's bonds have 25 years remaining to maturity. Interest is paid annually, they have a…

A: Value of the bond is present value of cash flows

Q: The Altoona Company issued a 25-year bond 5 years ago with a face value of $1,000. The bond pays…

A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Pace University has bonds on the market making annual payments, with eight years to maturity, a par…

A: Calculation of coupon rate on bonds: Answer: Coupon rate is 5.07%

Q: Three years ago, Jack’s Automotive Jacks issued a 20-year callable bond with a $1,000 maturity value…

A: Yield to maturity is the bond's return if the bond is held to maturity. For a coupon-paying bond,…

Q: Five years ago, ABC Firms issued $1,000 par value bonds with a 12% coupon rate and an original…

A: Following Formula will be used:

Q: Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of…

A: If market interest rate is 8%, then Price in Year 1 would be If market interest rate is 5%, then…

Q: he Mills Company bond, which currently sells for $1,080, has a 10% coupon interest rate and $1,000…

A: Par value of bond = $ 1000 Coupon rate = 10% Coupon amount = 1000*0.10 = $ 100 Years to maturity =…

Q: Westco Co. issued 15-year bonds a year ago at a coupon rate of 5.4 percent. The bonds make…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: Soborox Co. issued 25-year bonds, 17 years ago at a coupon rate of 12 percent. The bonds make…

A: Bonds are debts instruments that are issued by entities to raise funds and meet their capital…

Q: Five years ago, Thompson Tarps Inc. issued twenty-five-year 10% annual coupon bonds with a $1,000…

A: Price of the bond is present value of all future cash flows  Current yield = coupon payment /market…

Q: Today, Joe paid $12,000 for a bond which has $10,000 face value. The bond coupon rate is 10% per…

A: The yield to maturity is rate of return realized on the bond when held till maturity of bond period…

Q: The Nickelodeon Manufacturing Co. has a series of $1000 par value bonds outstanding. Each bond pays…

A: a)Calculation of Current Price of Bonds with 3 years maturity:Excel Spreadsheet:

Q: Five years ago, the city of Baltimore sold at par a $1,000 bond with a coupon rate of 8 percent and…

A: The value of the bond depends upon the coupon rate of the bond and the return required by the…

Q: A bond of $40,000 was issued by the Central Bank on August 17, 2012, with a 30-year maturity. The…

A: Bond price refers to the discounted present value of the payments made in the future. It is the…

Q: The company you work for is offering bonds that have a face value of $1,000 and a life of 10 years.…

A: Effective annual interest rate Effective annual interest rate defines the real return on investments…

Q: Carrie's Clothes, Inc. has a six-year bond outstanding that pays $80 annually. The face value of…

A: Company issues bonds for the purpose of raising some funds and these are all considered to pay fixed…

Q: Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual…

A: Bonds are the financial instruments that are used by the financial institutions to raise capitals…

Q: Renfro Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8%…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: The Altoona Company issued a 25-year bond 5 years ago with a face value of $1,000.  The bond pays…

A: Price and interest rate are inversely related. When interest rate is increasing, price will be…

Q: Bernard co. has 10% coupon bonds on the market that have 20 years left to maturity. The bonds will…

A: Any investor will always be willing to pay the present value of all future payments discounted at…

Q: what is the current market value of Elite's bond?

A: Number of periods = (20 - 9) * 2 = 22 Semi annual rate = 8% / 2 = 4% Semi annual coupon = [(7 / 100)…

Q: The Altoona Company issued a 25-year bond 5 years ago with a face value of $1,000.  The bond pays…

A: 1. The total term of the bond is 25 years, but bond issued 5 years ago. So, total term remaining is…

Q: The Brownstone Corporation’s bonds have 5 years remaining to maturity. Interest is paid annually,…

A: a) YTM if price is 829 N = 5 PMT = 1000*9% = 90 FV =- 829 FV = 1000

Q: A well-known industrial firm has issued $1000 bonds with a 3% coupon interest rate paid…

A: Bond is a long-term debt instrument which is issued by entities to raise debt form public-at-large.…

Q: Five years ago, Jolly company sold at par a $1,000 bond with a coupon rate of 8 percent and 20 years…

A: Using excel PV function

Q: Sprint has issued bonds that will mature in six years and pay an 8% coupon semiannually. If you paid…

A: For final decision we need fair value and to calculate the fair value we will use the below formula…

Q: Eight years ago, Over-the-Top Trampolines issued a 15- year bond with a $1,000 par value and a 6…

A: In this question we need to compute the bond's current value. We can compute bond's current value…

Q: Suppose that five years ago Cisco Systems sold a 15-year bond issue that had a $1,000 par value and…

A: a) Bond price for a semi-annual coupon is calculated in the excel. Note: yield to maturity (rate) is…

Q: Capex Inc. issues a bond of $1,000 which pays interest semiannually at a coupon interest rate of…

A: Capital markets is defined as the market, where the places of an investments as well as savings are…

Q: ​Enterprise, Inc. bonds have an annual coupon rate of 13 percent. The interest is paid semiannually…

A: The annual coupon rate of the bond is 13%. The maturity is 14 years. The face value of the bond is…

Q: Crane, Inc., has four-year bonds outstanding that pay a coupon rate of 7.00 percent and make coupon…

A: The calculation of yield to maturity is shown below:

Q: Eleven years ago, Elite Elements issued a 15-year bond with a $1000 face value and a 5 percent…

A: Bond is debt instrument which is used by organization to raise long term debt from public.…

Q: Dewey Cheetham & Howe Accounting firm is considering the purchase of a $1,000 New Haven Municipal…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Jackson Corporation’s bonds have 10 years remaining to maturity. Interest is paid annually, the…

A: Price of bonds is persent value of all coupons and persent value of face/par value of bond.  Formula…

Q: Bernard co. has 10% coupon bonds on the market that have 15 years left to maturity. The bonds will…

A: Face Value = 1000 Coupon = Coupon Rate * Face Value Coupon = 10% * 1000 Coupon = 100 YTM = 9%

Q: suppose a company issues $10,000 face value discount bond maturing in one year What's the price of…

A: Discount Bond is sold at price below par value with no interest payments and difference between…

Q: You will receive $60 interest every six months from your investment in a corporate bond. The bond…

A: a) What is the present value of the bond in the absence of inflation if the market interest rate is…

Q: Carrie's Clothes, Inc. has a seven-year bond outstanding that pays $50 annually. The face value of…

A: Ans 1. Bond's coupon rate is defined as the yield of coupon rate through the fixed income security…

Q: What is the present value, or worth, of this bond if investors are willing to accept a 10 percent…

A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…