Calculate the value of bonds, Financial Accounting

Assignment Help:

Calculate the value of each of the following bond

Issuer	Face Value	Coupon Rate	Maturity	Bid Yield	Bid Price
Japan	100,000,000 ¥	4.100 %	06/04	0.910 %	115.3660
Britain	1,000,000 £	5.750 %	12/09	5.200 %	104.3800
U.S.	1,000,000 $	5.250 %	05/04	5.740 %	97.9375

Calculate the value of each of the above bonds in U.S dollars given the following

Spot ($ / ¥) = 0.008422

Spot ($ / £) = 1.596700

SOLUTION:

The FV of Japan Bond = 100,000,000 ¥

Bid price = 115.3660

Hence Value of Bond = 115,366,000 ¥

Spot conversion rate = 0.008422 ($ / ¥)

Hence Value of Japan bond in US $ is = 115,366,000 * 0.008422 = 971,612.5 $

The FV of Britain Bond = 1,000,000 £

Bid price = 104.38

Hence Value of Bond = 1,043,800 £

Spot conversion rate = 1.5967 ($ / £)

Hence Value of Britain bond in US $ is = 1,043,800 * 1.5967 = 1,666,635 $

The FV of US Bond = 1,000,000 $

Bid price = 97.9375

Hence Value of Bond = 979,375 $

Spot conversion rate = 1 ($ / $)

Hence Value of U.S. bond in US $ is = 979,375 * 1.00 = 979,375 $

Related Discussions:- Calculate the value of bonds

Calculate annual constant probability and face value, Greek Debt Exchange ...

Greek Debt Exchange On the evening of February 20, 2012 private institutional investors, representatives of the IMF, ECB, and European governments agreed to a major "intervention"

Assets, all types of assets

all types of assets

Compute the effect on retail sales, Molina Medical Supply Company is trying...

Molina Medical Supply Company is trying to decide whether or not to continue distributing hospital supplies. The following information is available for Molina's business segments.

Combined income statement-branches, Combined income statement The figur...

Combined income statement The figures to appear in the combined income statement are based on the following diagram: 1) An arrow pointing into a box refers to purchase

Illustration of head office records-branches, Illustration of Head office r...

Illustration of Head office records In order to provide a check that branch managers and staff deal properly with goods and cash passing through their hands, goods are normally

Significant findings or issues, Significant Findings or Issues - Substanti...

Significant Findings or Issues - Substantive matters which are vital to procedures performed, conclusions reached or evidence obtained and include though aren't limited to: 1.

Calculate weighted average shares, Long-term Debt ...

Long-term Debt 10% notes payable $1,000,000 7% convertible bonds payable 5,000,000 Discount

Consolidated financial sttements, Cherry Ltd has the following segment info...

Cherry Ltd has the following segment information from the consolidated financial statements for the years ended 31 December 2011 and 2012: Operating segments C V I N$ N$ N$ Sales

Define return on capital employed, Q. Define Return on capital employed? ...

Q. Define Return on capital employed? Return on capital employed (ROCE) is as well called accounting rate of return. Distinctly IRR ROCE uses average annual accounting profit b

Deferred tax-income tax-financial statement, Deferred tax A company may e...

Deferred tax A company may enter into transactions in the current financial period that may result in the firm either paying or saving some tax in the future. The tax that may be

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages