Calculate the yield to maturity of the bond on issue

Assignment Help Finance Basics
Reference no: EM132602359

1. Butchery Withoutbones issued the following bond:Amount: € 125m Issue price: 99.731%

Date of issue: 20 February 2014

Settlement date: 20 February 2014

Maturity: 7 years

Annual coupon: 5.5%, i.e. in one instalment on 20 February of each year, with the first payment on 20 February 2015.

Normal redemption date: The bonds will be redeemed in full on 20 February 2021 at par value.

(a) Calculate the yield to maturity of the bond on issue, its modified duration and its duration.

(a) On 21 February 2015, the yield to maturity on bonds comparable to the Butchery Withoutbones bond is 5%. Calculate the value, the modified duration and the duration on this date of the Butchery Withoutbones bond. What are your comments compared to previous results.

Reference no: EM132602359

Questions Cloud

Find the current price of the item : If the rate of inflation is 3.9% per year, the future price p(t) (in dollars) of a certain item can be modeled by the following exponential function
Make a trading and profit and loss account for the year : Make a trading, profit and loss account for the year ended 31st March 2018. Purchases include 4000 kg tea valued at Shs.20,000, which was found totally spoilt.
What is the ear of arrangment : The store will allow you to make weekly payments of $28.48 for one year to pay off the loan. What is the EAR of this arrangment?
Explain the rationale behind the idea : Explain the rationale behind the idea that equity is a call option on a firm's assets. In other words, explain why equity ownership of a firm
Calculate the yield to maturity of the bond on issue : Butchery Withoutbones issued the following bond:Amount: € 125m Issue price: 99.731%
Calculate the eac for machine : Vandelay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,150,000
What is the required rate of return on the project : A project under consideration has an internal rate of return of 15% and a beta of 0.6. The risk-free rate is 5%, and the expected rate of return
CMSC 206 Python Programming Assignment : CMSC 206 Python Programming Assignment Help and Solution, Montgomery College - Assessment Writing Service - State of the Union Speeches
Find bond equivalent yield today : If the T-bill is bought or sold today, the number of days from the settlement day to maturity is 104 days. What is its bond equivalent yield today?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd