a.
To calculate: The current price of the bond of Oslen Mining Company.
Introduction:
Bond:
It is a long term loan borrowed by corporations, organizations, or the government for the purpose of raising capital. It is issued at fixed interest depending upon the reputation of the corporation and also termed as fixed-income security.
b.
To calculate: The current yield of bond of Oslen Mining Company.
Introduction:
Bond:
It is a long term loan borrowed by corporations, organizations, or the government for the purpose of raising capital. It is issued at fixed interest depending upon the reputation of the corporation and also termed as fixed-income security.
c.
To calculate: The new Current Yield of the bond of Oslen Mining Company.
Introduction:
Bond:
It is a long term loan borrowed by corporations, organizations, or the government for the purpose of raising capital. It is issued at fixed interest depending upon the reputation of the corporation and also termed as fixed-income security.
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Chapter 19 Solutions
BUS 225 DAYONE LL
- GAMA Corp has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000 and a yield to maturity of 8.5% . What is the price of the bonds? Show calculation in excel for better understandingarrow_forwardRove Enterprises has bonds on the market making annual payments, with 10 years to maturity, and selling for $935. At this price, the bonds yield 6%. a) What is the value of the yearly coupon payment on Rove Enterprises' bonds? b) What must the coupon rate be on the bonds? c) Are the bonds of Rover Enterprises considered discount bonds or premium bonds and why?arrow_forwardKaiser Industries has bonds on the market making annual payments, with 14 years to maturity, a par value of $1,000, and a current price of $1,108.60. At this price, the bonds yield 7.5 percent. What is the coupon rate? Is there a way to set this up in Excel? Please show your work- I'm trying to understand the process. Thank you.arrow_forward
- Show all your work. The bonds issued by XYZ CO. currently sell for $1,020. They have a 8-year maturity, an annual coupon of $75, and a par value of $1,000. What are their current yield and capital gains yield during the current year?arrow_forwardRenfro 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 bonds is $1,100. What is the bond’s yield to maturity, current yield and capital gains yield? how to calculate in excelarrow_forwardHousing and Development Board (HDB) Ltd also currently sells corporate bonds to investors for$1,120. The coupon rate is 15 percent and par value of $1,000. Interest is payable annually, andmaturity period is for 10 years. To provide income stability, you want to find out the following: i. Current Yield ii. Yield to maturity iii. Explain the relationship that exists between the coupon interest rate and yield to maturity and par value and market value of a bondarrow_forward
- Rick Barr Properties has two bonds outstanding. Bond A was issued 15 years ago with a coupon rate of 8%. The other, Bond B, was issued 12 years ago with a coupon rate of 8%. Both bonds were originally issued as 30-year bonds with coupon payments made semi-annually. The current market rate (YTM) is 11%? What is the current price of Bond A? What is the current price of Bond B?arrow_forwardGabriele Enterprises has bonds on the market making annual payments, with 10 years to maturity, a par value of $1,000, and selling for $900. At this price, the bonds yield 8.8 percent. What must the coupon rate be on the bonds? A. 8.80% B. 14.51% C. 8.06% D. 7.26% E. 7.36%arrow_forwardCarla Vista, Inc., has bonds outstanding that will mature in eight years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $895.92, what is the yield to maturity that an investor who buys them today can expect to earn? (Round answer to 3 decimal place, e.g. 5.275%.) Yield to maturity % What is the effective annual yield? (Round answer to 3 decimal places, e.g. 5.275%.) Effective annual yield %arrow_forward
- MAC Inc.'s bonds currently sell for $1,150. They have a 6-year maturity, an annual coupon of $85, and a face value of $1,000. What is their yield to maturity, current yield, and capital gains yield? Please show work in excelarrow_forwardThe Photo Film Company’s bonds have fouryears remaining to maturity. Interest is paid annually,the bonds have a $1,000 par value, and the couponinterest rate is 8.75%.(a) What is the yield to maturity at a current marketprice of $1,108?(b) Would you pay $935 for one of these bonds ifyou thought that the market rate of interest was9.5%?arrow_forwardMeade Corporation bonds mature in 22 years and have a yield to maturity of 8.2 percent. The par value of the bonds is $1,000. The bonds have a 7 percent coupon rate and pay interest on a semiannual basis. What are the current yield and capital gains yield on the bonds for this year? (Assume that interest rates do not change over the course of the year.) O CY= 7.97%; CGY = 0.23% O CY= 7.97%; CGY = 0.43% O CY= 7.77%; CGY = 0.43% O CY= 7.77%; CGY = 0.23% O CY= 7.97%; CGY = 0.03%arrow_forward
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