What is current price of bond and fair price for this bond

Assignment Help Financial Management

Reference no: EM13873339

1. You have a bond with annual coupon payments of $30, the interest rate for comparable bonds is 5%, and there is a maturity value of $150 in 4 years. What is the current price of the bond?

(Show all work)

2. You buy a bond that is selling at par. ($100 face value, 8% coupon rate, 8% mkt rate, due in 3 years).You hold it for one year and the market interest rate changes to 10%; what is a fair price for this bond?

3. What is the value of a bond with a $50 face value, 10% coupon payments (received SEMIANNUAL), a market interest rate of 25%, and matures in 10 years.

4. You just sold a bond with annual coupon payments of $15, the interest rate for comparable bonds is 15%, and there is a maturity value of $60, and matures in 5 years. You bought this bond for $50 one year ago. What is your yield? (Remember that there are two components of yield, price appreciation and interest received; make sure you line up these amounts to find your total return)

Reference no: EM13873339

Questions Cloud

Purchasing new home and need to borrow from mortgage lender : You are purchasing a new home and need to borrow $250,000 from a mortgage lender. The mortgage lender quotes you a rate of 6.25% APR for a 30-year fixed rate mortgage. The mortgage lender also tells you that if you are willing to pay two points, they..

The recapture of net working capital at the end of project : The recapture of net working capital at the end of a project will __________

Corporate bond-which of the best describes this bond : A corporate bond makes payments of $9.67 every month for ten years with a final payment of $2009.67. Which of the following best describes this bond?

Mutual fund that is expected to earn a rate of return : Suppose you invest $1000 into a mutual fund that is expected to earn a rate of return of 10%. The amount of money will you have in ten years is closest to which of the following? The amount you will have in 50 years is closest to which of the followi..

What is current price of bond and fair price for this bond : You have a bond with annual coupon payments of $30, the interest rate for comparable bonds is 5%, and there is a maturity value of $150 in 4 years. What is the current price of the bond? You buy a bond that is selling at par. ($100 face value, 8% cou..

Yield to maturity and yield to call : Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 10% annual coupon payment, and their current price is $1,175. The bonds may be called in 5 years at 109% of face value (Call price = $1,..

Bond is premium bond making annual payments : Bond X is a premium bond making annual payments. The bond has a coupon rate of 8.9 percent, a YTM of 6.9 percent, and has 14 years to maturity. Bond Y is a discount bond making annual payments. What do you expect the prices of these bonds to be in 12..

Motivations for using qualitative test for impairment : Defines impairment, goodwill and qualitative assessment. Provide impairment and an explanation of its impact on financial statements. What are the benefits of impairment recording to financial statement users. What are the motivations for using a qua..

What must the coupon rate be on the bonds : Volbeat Corporation has bonds on the market with 16.5 years to maturity, a YTM of 10.6 percent, and a current price of $942. The bonds make semi annual payments. What must the coupon rate be on the bonds?

User Account

All Pages