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A 15,000, 5 ½% bonds with quarterly coupons is priced to yield 4 ½% converted quarterly.
If it is redeemable at 104% at the end of t20 years, find the coupon payment, redemption
value, purchase price and bond premium. (
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- Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?A 7,000, 5% bond with annual coupons, redeemable at 108 at the end of 5 years is priced to yield 4%, m=1. Construct a table showing the amortization of premium. (Amortization of Premium)A 14-year, $1,000 par value Fingen bond pays 6% interest annually (assume semi- annual payments). The price of the bond is $1,100 and the market's required yield to maturity on a comparable-risk bond is 5.50%. a. Compute the bonds yield to maturity. b. Determine the value of the bond to you, given your required rate of return (the YTM on a comparable-risk bond). c. Should you purchase the bond? a. b. Coupon rate Par (FV) Years (n) m PMT PV (price) YTM Coupon rate Par (FV) Years (n) m PMT PV (price) YTM 6.0% $1,000 14 2 $30 Calculation $1,100 6.0% $1,000 14 2 $30 Calculation Note: if you want PV to be a positive number, you must use a minus sign for both pmt and FV 5.50%
- A 15,000, 5 ½% bonds with quarterly coupons is priced to yield 4 ½% converted quarterly. If it is redeemable at 104% at the end of t20 years, find the coupon payment, redemption value, purchase price and bond premium. (Bond Valuation)A 20,000, 1 ½% bonds with annually coupons are priced to yield 4 ½% converted annually. If it is redeemable at 104% at the end of 21 years, find the coupon payment, redemption value, purchase price and bond premium. (Bond Valuation)A P^(7),000 bond with interest at 8% payable semi annually is priced to yield 5%, m=12. Find the bond premium and value of the bond if it is redeemable at par at the end of 12 years and 6 months.
- . A 7,000, 5% bond with annual coupons, redeemable at 108 at the end of 5 years is pricedto yield 4%, m=1. Construct a table showing the amortization of premium. (Amortization ofPremium)A 10,000 bond wit interest at 6% payable quarterly is bought to yield 4 ½% converted quarterly. On a certain date, the book value of the bond is 11,000. Find the book value just after the next coupon payment is made. (Amortization of Premium)A 10,000 bond wit interest at 6% payable quarterly is bought to yield 4 ½% convertedquarterly. On a certain date, the book value of the bond is 11,000. Find the book value justafter the next coupon payment is made. (Amortization of Premium)
- A P1,000 bond which mature in 10 years and with a bond rate of 5% payable annually is to be redeemed at par at the end of this period. It is sold at P1,030. Determine the yield at this price. Manual solutionBond Z pays $98 annual interest and has a market value of $870. It has five years to maturity. Assume the par value of the bonds is $1,000. Approximate Yield to Maturity? Exact Yield to Materity?A P1,000 bond which mature in 10 years and with a bond rate of 5% payable annually is to be redeemed at par at the end of this period. It is sold at P1,030. Determine the yield at this price. With Cash flow diagram