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What is the value of the bond-sandhill corp

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Reference no: EM132505564

1) Sandhill Corp is issuing a 10-year bond with a coupon rate of 13 percent. The interest rate for similar bonds is currently 7 percent. Assuming annual payments, what is the value of the bond?

2) Jason Allen just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Blossom Corp. that pays an annual coupon rate of 5.0 percent. If the current market rate is 8.50 percent, what is the maximum amount Jason should be willing to pay for this bond?

3) Crane, Inc., has issued a three-year bond that pays a coupon rate of 6.6 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.8 percent, what is the market value of the bond?

4) Crane Inc. has seven-year bonds outstanding that pay a 13 percent coupon rate. Investors buying these bonds today can expect to earn a yield to maturity of 6.450 percent. What is the current value of these bonds? Assume annual coupon payments.

5) Nancy Jackson is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 11.8 percent. Assume annual coupon payments. What is the current value of this bond?

Reference no: EM132505564

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