Find the current bond price

Reference no: EM1344030

1. Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10% coupon bond sells at par? Two years from now the required return on the same bond is 8%. What is the coupon rate on the bond now? The YTM?

2. Suppose you buy a 7% coupon, 20 year bond today when it's first issued. If interest rates suddenly rise to 15%, what happens to the value of your bond? Why?

3. IRT Company has 7% coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 9%, what is the current bond price?

4. The Timber Co. has 10% coupon bonds on the market with 9 years left to maturity. The bonds make annual payments. If the bond currently sells for $1,145.70, what is the YTM?

5. MAX Enterprises has bonds on the market making annual payments, with 16 years to maturity and selling for $963. At this price, the bonds yield 7.5 percent. What must the coupon rate be on Merton's bonds?

Reference no: EM1344030

Questions Cloud

Relevant governance or ethical issues : Describe any relevant governance or ethical issues the M&A activity faced during its formative term? Discuss specifics and how the issue was handled.

Find the debt to capital ratios : Coefficient of variation for each of the following debt-to-capital ratios - Round your answers to two decimal places at the end of the calculations

Given this situation you would describe wine as a : You have come to realize which you are only buying 3 bottles of wine a week now whereas you utilized to buy six bottles of wine when you made $60,000 a yr. Given this situation you would describe wine as a.

Skills required by personnel working in information security : What skills are required by personnel working in information security? Write down some job titles in the field and come up with some required qualifications and some desirable qualifications.

Find the current bond price : IRT Corporation has 7% coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 9%, find the current bond price?

Find current bond price and ytm : AR store issued 15 year bonds one year ago at a coupon rate of 6.1 percent. The bonds make semi-annual payments. If the YTM on these bonds is 5.3 percent, calculate the current bond price?

Find what was the firms economic val added : How much value did management add to stockholders' wealth during 2012 - What was the firms Economic Val Added

Implementation of data member counter of type int : Write the implementation (.cpp file) of Counter class. Here is the full specification of the class: A data member counter of type int.

Finance related multiple choice question : When you refer to a bond's coupon, you are referring to which one of the following?

User Account

All Pages