Calculate the value of bonds, Financial Accounting

Calculate the value of each of the following bond

Issuer

Face Value

Coupon Rate

Maturity

Bid Yield

Bid Price

Japan

100,000,000 ¥

4.100 %

06/04

0.910 %

115.3660

Britain

1,000,000 £

5.750 %

12/09

5.200 %

104.3800

U.S.

1,000,000 $

5.250 %

05/04

5.740 %

  97.9375

Calculate the value of each of the above bonds in U.S dollars given the following

Spot ($ / ¥) = 0.008422

Spot ($ / £) = 1.596700

 SOLUTION:

The FV of Japan Bond = 100,000,000 ¥

Bid price = 115.3660

Hence Value of Bond = 115,366,000 ¥

Spot conversion rate = 0.008422 ($ / ¥)

Hence Value of Japan bond in US $ is = 115,366,000 * 0.008422 = 971,612.5 $

The FV of Britain Bond = 1,000,000 £

Bid price = 104.38

Hence Value of Bond = 1,043,800 £

Spot conversion rate = 1.5967 ($ / £)

Hence Value of Britain bond in US $ is = 1,043,800 * 1.5967 = 1,666,635 $

 The FV of US Bond = 1,000,000 $

Bid price = 97.9375

Hence Value of Bond = 979,375 $

Spot conversion rate = 1 ($ / $)

Hence Value of U.S. bond in US $ is = 979,375 * 1.00 = 979,375 $

Posted Date: 2/27/2013 2:00:33 AM | Location : United States







Related Discussions:- Calculate the value of bonds, Assignment Help, Ask Question on Calculate the value of bonds, Get Answer, Expert's Help, Calculate the value of bonds Discussions

Write discussion on Calculate the value of bonds
Your posts are moderated
Related Questions
the salaries paid in 2004 is rs. 500000 salaries outstanding is rs.20000 salaries paid in advance for 2004 is rs 30000 what is the actual salary expenditure for 2004?

Statement of Cash Flows - A statement of cash flows is one of the fundamental financial statements which is required as part of a complete set of financial statements prepared in c

Q. Show the Foreign Tax Credit? Foreign Tax Credit - A U.S. taxpayer who pays or accrues income tax to a foreign country may elect to credit or deduct these taxes in a determin

1. Prepare three years of monthly cash budgets, yearly income statements, and yearly balance sheets for the jewelry business Daisy & Company. General Information: 1. Th

1.From the following information you are required to prepare a cash Flow statement of XYZ Ltd for the year ended 31 st December 2009 LIABILITIES

The purchase of a car needs a $23,410 loan to be repaid in monthly installments for 4years at 12% annual real interest rate. If annual inflation rate is 4%, find the extra amount t

Provisions of the Partnership Act In the event of absence of a partnership agreement/deed or in the event of ambiguity therein, the provisions to the partnership Act will apply

calculate the ratios of the company called ''Apple''

Dividends out of the capital profits Dividends out of the capital profits are apportioned on the same basis as dividends out of income (Re. Doughty). (a) Variation of sec

Seattle Health Plans currently uses zero debt financing.  Its operating income (EBIT) $1 million, and it pays taxes at a 40 percent rate.  It has $5 million in assests and because