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Calculate the value of a bond that matures

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Reference no: EM132354576

1. ?(Bond valuation) Calculate the value of a bond that matures in 19 years and has a $ 1 comma 000 par value. The annual coupon interest rate is 11 percent and the? market's required yield to maturity on a? comparable-risk bond is 9 percent.

2. Bond valuation) A bond that matures in 10 years has a ?$1 comma 000 par value. The annual coupon interest rate is 7 percent and the? market's required yield to maturity on a? comparable-risk bond is 12 percent. What would be the value of this bond if it paid interest? annually? What would be the value of this bond if it paid interest? semiannually?

3. (Bond valuation) ?Pybus, Inc. is considering issuing bonds that will mature in 16 years with an annual coupon rate of 9 percent. Their par value will be ?$1 comma 000?, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds? and, if it? does, the yield to maturity on similar AA bonds is 11 percent. ? However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A? rating, the yield to maturity on similar A bonds is 12 percent. What will be the price of these bonds if they receive either an A or a AA? rating?

4. (Yield to? maturity) The market price is ?$1 comma 050 for a 12?-year bond ?($1 comma 000 par? value) that pays 11 percent annual? interest, but makes interest payments on a semiannual basis ?(5.5 percent? semiannually). What is the? bond's yield to? maturity?

5. Doisneau 18?-year bonds have an annual coupon interest of 12 ?percent, make interest payments on a semiannual? basis, and have a ?$1 comma 000 par value. If the bonds are trading with a? market's required yield to maturity of 13 ?percent, are these premium or discount? bonds? Explain your answer. What is the price of the? bonds?

6. (Bond valuation) ?Fingen's 14?-year, ?$1 comma 000 par value bonds pay 15 percent interest annually. The market price of the bonds is ?$950 and the? market's required yield to maturity on a? comparable-risk bond is 17 percent.

a. Compute the? bond's yield to maturity.

b. Determine the value of the bond to? you, given your required rate of return.

c. Should you purchase the? bond?

7. ?(Yield to? maturity) Abner? Corporation's bonds mature in 17 years and pay 7 percent interest annually. If you purchase the bonds for ?$750?, what is your yield to? maturity?

8. ?(Bond valuation) The 15?-year ?$1 comma 000 par bonds of Vail Inc. pay 12 percent interest. The? market's required yield to maturity on a? comparable-risk bond is 15 percent. The current market price for the bond is $ 910.

a. Determine the yield to maturity.

b. What is the value of the bonds to you given the yield to maturity on a? comparable-risk bond?

c. Should you purchase the bond at the current market? price?

Reference no: EM132354576

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