Reference no: EM132787204
Marco Bond is a billionaire who wants to invest some of its petty cash in corporate bonds. You, as the hired financial planner of Marco, suggested the following bonds who all have a yield to maturity of 10% and matures in 15 years:
- PCOR - 8% annual coupon rate; P1,000 face value
- PGOLD - 10% annual coupon rate; P1,000 face value
- PSE - 12% annual coupon rate; P1,000 face value
Problem 1.) On the issuance date, PCOR bond issued at
a. Discount because the yield to maturity is higher than the coupon interest rate
b. Par because the coupon rate is lower than the yield to maturity
c. Premium because the coupon rate is higher than the yield rate
d. Premium because the coupon rate is lower than the yield rate
Problem 2.) On the issuance date, PGOLD bond issued at
a. Discount because the yield to maturity is higher than the coupon interest rate
b. Premium because the coupon rate is lower than the yield rate
c. Par because the coupon rate is having no difference with yield rate
d. Premium because the coupon rate is higher than the yield rate
Problem 3.) On the issuance date, PSE bond issued at
a. Premium because the coupon rate is lower than the yield rate
b. Premium because the coupon rate is higher than the yield to maturity rate
c. Discount because the yield to maturity is higher than the coupon interest rate
d. Par because the coupon rate is having no difference with yield rate
Problem 4.) How much will Marco Bond pay if he will invest in PCOR bond today?
a. 847.88
b. 852.66
c. 1,000.00
d. 1,152.12
Problem 5.) How much will Marco Bond pay if he will invest in PGOLD bond today?
a. 852.66
b. 847.88
c. 1,152.12
d. 1,000.00
Problem 6.) How much will Marco Bond pay if he will invest in PSE bond today?
a. 852.66
b. 1,000.00
c. 847.88
d. 1,152.12