1 Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued...
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1 Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 6 years to maturity, and a coupon rate of 7.4 percent paid annually. If the YTM is 9.4 percent, what is the current bond price in euros? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 10 points eBook Hint Current bond price 2 10 points A Japanese company has a bond that sells for 102.413 percent of its ¥100,000 par value. The bond has a coupon rate of 6.1 percent paid annually and matures in 21 years. What is the yield to maturity of this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Yield to maturity % 3 Nikita Enterprises has bonds on the market making annual payments, with 18 years to maturity, a par value of $1,000, and selling for $965. At this price, the bonds yield 7.7 percent. What must the coupon rate be on the bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 10 points Coupon rate % 4 An investment offers a total return of 15 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 7.2 percent. What does Janice believe the inflation rate will be over the next year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 10 points Inflation rate % 5 Union Local School District has bonds outstanding with a coupon rate of 3.1 percent paid semiannually and 22 years to maturity. The yield to maturity on these bonds is 3.4 percent and the bonds have a par value of $10,000. What is the dollar price of the bonds? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 10 points Price 1 Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 6 years to maturity, and a coupon rate of 7.4 percent paid annually. If the YTM is 9.4 percent, what is the current bond price in euros? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 10 points eBook Hint Current bond price 2 10 points A Japanese company has a bond that sells for 102.413 percent of its ¥100,000 par value. The bond has a coupon rate of 6.1 percent paid annually and matures in 21 years. What is the yield to maturity of this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Yield to maturity % 3 Nikita Enterprises has bonds on the market making annual payments, with 18 years to maturity, a par value of $1,000, and selling for $965. At this price, the bonds yield 7.7 percent. What must the coupon rate be on the bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 10 points Coupon rate % 4 An investment offers a total return of 15 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 7.2 percent. What does Janice believe the inflation rate will be over the next year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 10 points Inflation rate % 5 Union Local School District has bonds outstanding with a coupon rate of 3.1 percent paid semiannually and 22 years to maturity. The yield to maturity on these bonds is 3.4 percent and the bonds have a par value of $10,000. What is the dollar price of the bonds? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 10 points Price
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Bond Pricing and Yield Calculations Heres the breakdown of each scenario with calculations 1 German ... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861704
11th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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