Reference no: EM133075301

1. a.How does a bond's par value differ from its market value?

b.Explain the differences among a bond's coupon interest rate, current yield, and required rate of return.

2. What are the basic differences among book value, liquidation value, market value, and intrinsic value?

3.(Bond valuation) Bellingham bonds have an annual coupon rate of 8 percent and a par value of $1,000 and will mature in 20 years. If you require a return of 7 percent, what price would you be willing to pay for the bond? What happens if you pay more for the bond? What happens if you pay less for the bond?

4.(Bond valuation) Calculate the value of a bond that will mature in 14 years and has a $1,000 face value. The annual coupon interest rate is 5 percent, and the investor's required rate of return is 7 percent.

5.(Bond valuation) ExxonMobil 20-year bonds pay 6 percent interest annually on a $1,000 par value. If the bonds sell at $945, what is the bonds' expected rate of return?

6.(Expected rate of return and current yield) Time Warner has bonds that are selling for $1,371. The coupon interest rate on the bonds is 9.15 percent, and they mature in 21 years. What is the yield to maturity on the bonds? What is the current yield?