Calculate annual coupon interest payments

Reference no: EM131948322

Question: All bonds have some common characteristics, but they do not always have the same contractual features. Differences in contractual provisions, and in the underlying strength of the companies backing the bonds, lead to major differences in bonds risks, prices, and expected returns. It is important to understand how bond markets actually function and what the appropriate terminology is.

Go to www.nyse.com Click on Data &Tech, under Data &Tech Resourceschoose Listed Quotes - scroll down, under Bonds click on View Directory. In the window "Issuer name" type the name of the company on your choice. Click Go.

In your initial response to the topic you have to answer all 8 questions.

1) Copy the quotation of one bond that contains the price "Last Trade Price". Present these quotations in your posting.

2) Describe the information that you received from the quote of the bond. You have to explain each number and symbol that appears in the bond quotation.

3) Assume that par value of the bond is $1,000. What was the last price of the bond in $$ (listed in Last Trade Price)?

4) Assume that par value of the bond is $1,000. Calculate annual coupon interest payments.

5) Assume that par value of the bond is $1,000. Calculate current yield of the bond.

6) Assume that par value of the bond is $1,000. Assume annual coupon payments. Calculate YTM of the bond using the last price (listed in Last Trade Price). (Round the number of years to the whole number). You should use Excel or financial calculator. Show your work.

7) Describe one major shortcoming for YTM and current yield.

8) How would the following affect the yield on newly issued bond? Please explain your answer.

a) The bonds are callable.

b) The bonds are subordinated to the existing bond issue.

c) The bond rating is better or worse than the Moody's Aa3 that the company anticipates.

Reference no: EM131948322

Questions Cloud

What is the fair price of one AFA bond : You own some bonds issued by Another Failing Airline Inc. (AFA). When AFA issued the bonds it was in good financial health and was able to get a coupon rate.

Evaluating the expected return on common stock : Boom and Bust Company is financed entirely by common stock that is priced to offer a 20% expected return. If the company repurchases 50% of the stock.

What is boogle worth today when it has no leverage : Boogle is back and has no debt! Boogle has an equity Beta of 1.6, with market expected return of 10% and a risk free rate of 3%.

Discuss the history of branding and a company : That being the case, discuss the history of branding and a company whose brand you most value.

Calculate annual coupon interest payments : Assume that par value of the bond is $1,000. Calculate annual coupon interest payments. Assume that par value of the bond is $1,000.

What is the most important concept : When hiring new employees, what is the most important concept that you should teach them during training and why? How can this relate to the success.

Identity as a distribution giant : This topic reminds me of how the Amazon offers features that solidify its identity as a distribution giant. When purchasing vitamins through Amazon

Find the company capital structure weights : Book Value versus Market Value. Bonaime, Inc., has 3.9 million shares of common stock outstanding. The current share price is $84, and the book value per share.

Define factors that affect the price of bonds : Bonds can sometimes be regarded as volatile based on several factors for examples interest rates being the most obvious.

User Account

All Pages