General Maiter%u2019s outstanding bond issue has a coupon rate of 10.6%, and it sells at a yield to maturity of 8.70%. The firm wishes to issue additional bonds to the public at face value. What coupon rate must the new bonds offer in order to sell at face value? (Round your answer to 2 decimal places.) Coupon rate %
Q: What is the bond's nominal coupon interest rate?
A: Answer:- 9.72% FV= 1000 Semi annual N=30*2=60 YTM=10.55/2=5.275%
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- Exercise: Dirty/cleanPrice calculation A bond has face value of $1000. The bond’s yield to maturityis 6% andthe annual coupon rate is 8% with semiannual coupon payments.The maturity of the bond is 5years. The bond was issued on 1/1/2017, and one bought on 4/1/2018. Answer the following three questions: a.What is the dirty price of the bond? b.What is the accrual interest of the bond? c.What is its clean price?Question1:Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of8%, and a par value of $1,000. The yield to maturity for this bond is 10%.a. What is the bond price if it matures in five or twentyyears? b. What do you notice about the bond price in relationship to the bond’smaturity? Question2:J&J Exporters paid a $1.80 per share annual dividend last month. The company is planning onpaying $2.00, $2.50, $2.75, and $3.00 a share over the next four years, respectively. After thatthe dividend will be constant at $3.20 per share per year. What is the market price of this stock ifthe market rate of return is 13 percent?Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Price $983.78 865.89 797.92 732.00 660.24 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4?
- Consider the following bonds: Bond A B CD с Coupon Rate (annual payments) 0.0% 0.0% 4.3% 7.7% The percentage change in the price of bond A is |___%. (Round to one decimal place.) What is the percentage change in the price of each bond if its yield to maturity falls from 6.9% to 5.9%? The percentage change in the price of bond B is %. (Round to one decimal place.) Maturity (years) 15 The percentage change in the price of bond C is %. (Round to one decimal place.) The percentage change in the price of bond D is %. 215004. a. A perpetual bond has Tk. 1,200 face value and provides a 10.5% coupon. If themarket price of the bond is Tk. 1,050, what is its yield to maturity? 03b. A zero-coupon, Tk. 1000 face-value bond is currently selling for Tk. 208 andmatures in exactly 10 years. What is the required rate of return on this bond? 04c. ABC Company has outstanding, an 10 percent, four year, Tk. 1,000 par valuebond on which interest is paid monthly. If the market rate of return is 15 percent,what is the intrinsic value of the bond?The prices of zero-coupon bonds with various maturities are given: maturity in years price 1 975.66 2 885.89 3 821.92 4 759.20 5 670.20 A) How could you construct a 1-year forward loan beginning in year 3? face value = ? rate of synthetic loan = ? B) How could you construct a 1-year forward loan beginning in year 4? face value = ? rate of synthetic loan = ?
- Problem: You are given the following data for two bonds with semiannual payments (A and B) Bond Settlement Date B 2/15/2020 2/15/2020 Maturity Date Coupon rate 2/15/2040 2/15/2040 4% 8% Similar bonds with 20 year to maturity sell for 9% coupon rates in the market. a) Calculate the bond value for bond A and B b) Calculate the YTM for bond A and B Bond Valuation Settlement Date 2/15/2020 2/15/2020 Maturity Date Coupon rate Required return Redemption Value Frequency Basis Calculate the PV of the bond in U.S. S 2/15/2040 2/15/2040 8% 4% 4.50% 4.50% 100 100 2 a) Use the Price Function B) Use the Yield FunctionQ1. Consider the following par bond (ie coupon rate=yield): Year 3 5 7 10Yld 0.83% 1.22% 1.45% 1.54% Q1a. based on linear interpolation, what is the expected yield for a 10 year note ONE year later, assuming yield curve shape stays the same? Q1b. how much should the 10y note be priced 1 year later (as a 9 year note)?What is the price of the following bond? Face value/redemption price : P1,037 Maturity: 10yrs Coupon rate: 9% Discount rate: 9% **Coupon rate (regular payment) Pls show the whole solution thank you!
- Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4? Required A Price $940.93 Complete this question by entering your answers in the tabs below. 868.39 800.92 735.40 670.48 Required B Maturity (years) 2 3 Calculate the forward rate of interest for each year. Note: Round your answers to 2 decimal places. Required C Forward Rate % % Prov 12 of 12 NextThe current zero-coupon yield curve for risk-free bonds is as follows: What is the price per $100 face value of a two-year, zero-coupon, risk-free bond? The price per $100 face value of the two-year, zero-coupon, risk-free bond is $ Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) 1 2 YTM 4.99% 5.53% Print 3 5.72% Done (Round to the nearest cent.) 4 5.92% 5 6.07% XAssume that you wish to purchase a 30-year bond that has a maturity value of P1,000 and a coupon interest rate of 9.5%, paid semiannually. If you require a 6.75% rate of return on this investment, what is the maximum price that you should be willing to pay for this bond? P1,352 P1,450 P675 P1,111