What was the ytm of pennington bonds

Assignment Help Financial Management

Reference no: EM132058303

The Pennington Corporation issued a new series of bonds on January 1, 1978. The bonds were sold at par ($1,000), have a 12 percent coupon, and mature in 30 years, on December 31, 2007. Coupon payments are made semiannually (on June 30 and December 31).

a. What was the YTM of Pennington’s bonds on January 1, 1978? Pennington’s bonds we sold at par value, the original YTM equaled the coupon rate of 12%.

b. What was the price of the bond on January 1, 1983, 5 years later, assuming that the level of interest rates had fallen to 10 percent?

c. Find the current yield and capital gains yield on the bond on January 1, 1983, given the price as determined in part b.

d. On July 1, 2001, Pennington’s bonds sold for $916.42. What was the YTM at that date?

e. What were the current yield and capital gains yield on July 1, 2001?

PLEASE SHOW STEP BY STEP CALCULATIONS,

Reference no: EM132058303

Questions Cloud

Characteristics before building phylogenetic trees : Why is it so important for scientists to distinguish between homologous and analogous characteristics before building phylogenetic trees?

Do you have a toxicity or deficiency : Do you have a toxicity or deficiency? Explain any disorders associated with the deficiency or toxicity. Briefly describe what your recommended daily allowance.

Do you think that any of the issues that arose for minority : Do you think that any of the issues that arose for minority groups at this time still exist today?

Identify the function of your chosen agency : Identify the function of your chosen agency. Does it function include executive, legislative, or judicial powers.

What was the ytm of pennington bonds : What was the YTM of Pennington’s bonds on January 1, 1978? Pennington’s bonds we sold at par value, the original YTM equaled the coupon rate of 12%.

Which is most likely to cause peripheral edema : Which is most likely to cause peripheral edema?

Which is the likely second antihypertensive medication : Which is the likely second antihypertensive medication?

Identify and describe one domestic policy : Name your political party. Identify and describe one domestic policy that your party would believe in. Give a paragraph description of that domestic policy.

What is the structure of atp : What is the structure of ATP and how does it work? Why is it important? How does it differ from NADPH?

User Account

All Pages