What would the annual yield to maturity be on the bonds

Assignment Help Financial Management

Reference no: EM13870598

1. Fresh Water Inc sold an issue of 17-years $1,000 par value bonds to the public. The bonds have a 8.47 percent coupon rate and pay interest annually. The current market rate of interest on the Fresh Water, Inc bonds is 12.81 percent. What is the current market price of the bonds? Round the answer to two decimal places.

2. General Mills has a $1,000 par value, 11-years to maturity bonds outstanding with an annual coupon rate of 9.67 percent per year paid semi annually. Market interest rates o similar bonds are 10.86 percent. Calculate the bond’s price today. Round the answer to two decimal places.

3. Dan is considering the purchase of Supper Technology inc bonds that were issued 3 years ago. When the bonds were originally sold they had a 24-year maturity and a 6.19 percent coupon interest rate, paid annually. The bonds are currently selling for $882. Par value of the bonds is $1,000. What is the yield to maturity on the bonds if you purchase the bonds today? Round the answer to two decimal places.

4. A few years ago Spider web inc issued with a 11.79 percent annual coupon rate paid semiannually. The bonds have a par value of $1,000 a current price of $702 and will mature in 23 years. What would the annual yield to maturity be on the bonds if you purchase the bonds today?

Reference no: EM13870598

Questions Cloud

Yield to maturity and call with semi annual payments : Thatcher corporation's bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semi annually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,050. What is their yield ..

What rate can you lock-in today through such a hedge : On March 21, you observe that 3-month LIBOR is 4.50%; 6-month LIBOR is 4.65%; June Eurodollar futures are priced at 95.25; and September Eurodollar futures are priced at 95.15. You owe a floating rate interest payment payable in September, but which ..

PV and Effective Annual Rate : Assume that you inherited some money. A friend of yours is working as an unpaid intern at a local brokerage firm and her boss is selling securities that call for 4 payments of $50 (1payment at the end of each of the next 4 years) plus an extra paymen..

How much should you be prepared to pay for the stock : You believe that the Non-stick Gum Factory will pay a dividend of $3 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 2% a year in perpetuity. If you require a return of 12% on your investment, how much should you ..

What would the annual yield to maturity be on the bonds : A few years ago Spider web inc issued with a 11.79 percent annual coupon rate paid semiannually. The bonds have a par value of $1,000 a current price of $702 and will mature in 23 years. What would the annual yield to maturity be on the bonds if you ..

An at- the- money call option with strike : An at- the- money call option with a strike of 50, 24 days left to expiration and a risk free rate of 0.25% is trading at $1.03. Using the Black-Scholes formula, what will be the price of this option one day later, assuming that all other inputs rema..

What is the target stock price in five years : In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1...

What is the target share price in seven years : Davis, Inc., currently has an EPS of $2.16 and an earnings growth rate of 7 percent. The benchmark PE ratio is 20. What is the target share price in 7 years?

What is the rate of inflation : The nominal rate of return on the bonds of Stu's Boats is 9.25 percent. The real rate of return is 3.9 percent. What is the rate of inflation?

User Account

All Pages