What is the annual coupon rate of the bardy bond

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Assignment

1. Syke Corp bonds bearing a coupon rate of 8%, pay coupons semiannually, have 10 years remaining to maturity, but callable in 2 years from now at 10% call premium with a par value of $1,000. It is currently priced at $1,105.50 per bond. What is the Syke Corp annual yield to call?

2. A ten years maturity bond with a coupon rate of 3% is now selling at $980. What would be the current yield and capital gain yield for this bond one year from now assuming the yield to maturity of this bond is unchanged?

3. Bardy bond is currently selling at $1,009.44 with 6 years to its maturity. Currently the interest rate is 6% APR compounded semi-annually. What is the annual coupon rate of the Bardy bond if the bond pays semi-annual coupon payments?

4. In 2012, Smith Inc. free cash flow was $8 billion. For the next 2 years (2013 and 2014), its free cash flows are projected at $9 billion and $11 billion respectively. After 2014, its free cash flow is expected to be constant at $14 billion forever. If the cost of capital for Smith Inc. is 7% and its total share outstanding is 4.2 billion shares, calculate Smith present value of intrinsic value per share today.

Reference no: EM131106766

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