Find the yield to maturity on the issue

Assignment Help Corporate Finance
Reference no: EM1345595

Assume Venture Healthcare sold bonds that have a 10-year maturity, a 12% coupon rate with annual payments, and a $1,000 par value. Suppose that two years after the bonds were issued, the required interest rate fell to 7%. What would be the bonds value? Suppose that two years after the bonds were issued, the required interest rate rose to 13%. What would be the bonds value? What would be the value of the bonds three years after issue in each scenario above, assuming that interest rates stayed steady at either 7% or 13%?

Twin Oaks Center has a bond issue outstanding with a coupon rate of 7% and 4 years remaining until maturity. The par value of the bond is $1,000, and the bond pays interest annually.
a) what is the current value of the bond if present market conditions justify a 14% required rate of return?
b)If Twin oaks' four year bond had semiannual coupon payments. What would be it current value?
c) Assume that it had a semiannual coupon but 20 years remaining to maturity. What is the current value under these conditions? (Assuming a 7% semiannual required rate of return).

Minneapolis health system has bonds outstanding that have four years remaining to maturity, a coupon interest rate of 9% paid annually and a $1,000 par value.
a) What is the yield to maturity on the issue if the current market price is $829
b) If the current market price is $1104
c) Would you be willing to buy one of these bonds for $829 if you required a 12% rate of return on the issue?

Six years ago, Bradford Hospital issued 20 year municipal bonds with a 7% annual coupon rate. The bonds were called today for a $70 call premium- that is, bondholders received $1070 for each bond. What is the realized rate of return for those investors who bought the bonds for $1,000 when they were issued.

 

Reference no: EM1345595

Implementing the strategy of not paying bills

Based on the numbers from your Individual Project, do you feel that the manager of S&J Plumbing, Incorporated has delivered a good profit margin? Support your argument.

How many new shares must the company sell

The company's legal, accounting, and printing expenses associated with the seasoned offering are estimated to be $450,000. How many new shares must the company sell to net $

Pricing and purchasing changes

Use correct terms and theories to analyze the case provided below. The analysis answer the following questions: How would you determine the pricing and buying changes.

What happens to the value of your bond

Suppose you buy a 7 percent coupon, 20-year bond today when it's first issued.  If interest rates suddenly rise to 15 percent, what happens to the value of your bond? Why?

Determine the effective annual rate of return

How much would you pay for an investment that will provide cash inflows of $6000 per year at the beginning of each of the next 8 years if you require a minimum of 12% rate o

Calculate the following for general mills

You should look for publicly traded bonds for the firm and the Yield to Maturity (YTM) for the 10 year term bond would be an appropriate rate. You may use www.finra.org or m

Provide an evaluation of mutual fund and money market fund

Provide an evaluation of Mutual fund, and money market fund. Your target audience should be your direct supervisor or management team. Explain each of these topics in broad te

Calculate the variance for portfolio

Calculate the variance for each portfolio and then copy it down. This formula should have six values in it: 1 for Stock and what is the smallest standard deviation that you mu

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd