Calculation of yield to maturity on bonds and finding out

Reference no: EM1314504

Calculation of yield to maturity on bonds and finding out reason

The following bond quotations are taken from the Wall Street Journal dated Friday, September 5, 2003

Company	Coupon	Maturity	Last Price	Yield
International Paper	6.75	Sep. 1, 2011	108.198	5.468
Sara Lee	3.875	15-Jun-13	89.700	5.235
Wells Fargo	7.25	24-Aug-05	109.645	2.191
General Motors	7.125	15-Jul-13	101.201	6.952
Lincoln National	7.125	Dec. 15, 2011	105.903	5.307

a.) Explain why the International Paper bond is selling at a premimum but Sara Lee is selling at a discount

b.) Why is the yeild (yield to maturity) on the General Motors bond so much higher than the yield on the Sara Lee bond?

Reference no: EM1314504

Questions Cloud

Justify the term bond valuation : Justify the term Bond valuation where would sell for a premium if interest rates were below 9 percent and would sell for a discount if interest rates were greater than 11 percent

Critical value based on f-distribution : The null hypothesis is to be tested at the 10% level of significance. The critical value from the table is:

Hypothesis test for variance of the population : We are interested in testing to see if the variance of a population is less than 7. The correct null hypothesis is:

Responsibility accounting performance report : Responsibility Accounting Performance report for various departments in firm and The office department's annual budget and its actual costs

Calculation of yield to maturity on bonds and finding out : Calculation of yield to maturity on bonds and finding out reason and explain why the International Paper bond is selling at a premimum but Sara Lee is selling at a discount

Find the greatest number of care packages : Find the greatest number of care packages.

Describe why an equal percentage increase : Describe why an equal percentage increase (or decrease) in sales for each firm would have such differing effects on operating income. Evaluate the ratio of contribution margin to operating income for each firm in 2008. (Hint: Divide contribution..

Business cycle and unemployment : What is business cycle? Describe the four phases of the business cycle. Where on the business cycle do you think the U.S. economy is today?

Equivalent test statistic : We want to test the hypothesis that population B has a smaller variance than population A.

User Account

All Pages