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
Hydroponics is considering adding another greenhouse that would cost $95,000 and generate $20,000 in annual net cash flows over its 8 year expected life. What is this project's int

agency conflicts and solutions in shareholders vs auditors

On 1 January 2008, a young artist called Michelangelo signed a contract with a charity named Art Angels, which supports young artists to do large projects. The agreement requires M

what are the concept of economic substance over legal form under accounting for lease?

prepare an balance sheet


what is the formulae for calculating Net income?

Indicate by check mark ("9") or "X" which accounts are found on the income statement and which accounts are found on the balance sheet.   Account Name In

I want to do research on investment property which research topics are appropriate

Q. Chrissy currently has a credit card that charges 15 percent interest. She usually carries a balance of about $500. Chrissy has received an offer for a new credit card with a tea