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Determine the payment you should make for the bonus

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Questions - Valuing stocks and bonds

Q1. Suppose you invest in a circulating bond with an annual coupon of 6% and a remaining maturity of 10 years. The bond has a face value of $ 900 and a market interest rate of 8%. Determine the payment you should make for the bonus.

Q2. Mobile Motors Inc. bonds have 12 years left to maturity. Interest is paid annually, has a face value of $ 2,000, the coupon interest rate is 7% and an 11% yield to maturity. Determine the current price of the bond in the market.

Q3. Cassidy Industries' outstanding bonds have a face value of $ 800, a semi-annual coupon of 8%, 12 years to maturity, and a YTM of 10%. Determine the price of the bond.

Q4. Suppose a bond has a face value of $ 3,000, 10 years to maturity, an annual coupon of 7%, and is selling for $ 2,800. Calculate yield to maturity (YTM). Calculate the price 4 years from now, assuming the yield to maturity remains constant.

Q5. Suppose Roberto is considering a 12-year bond with a face value of $ 2,000 and a rate of 8% payable semi-annually. Calculate the payment Roberto would have to make if an "effective" annual interest rate of 8.2% were required.

Reference no: EM132853601

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