3.16. The investors require 8% return on Keitel Corporation 5s2024 bonds that pay interest semiannually. Find...
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3.16. The investors require 8% return on Keitel Corporation 5s2024 bonds that pay interest semiannually. Find the price of one of these bonds in 2011. $760.26 ♥ 3.17. Adapazari Company 7% coupon bonds pay interest semiannually. When you bought one of these bonds, it had 11 years to maturity, and the appropriate discount rate was 9%. After one year, the discount rate on such bonds is 8% because of the improved financial health of the company. If you sell the bond today, what would be your capital gain or loss? $69.89 gain ♥ 3.18. Zeller Co bonds are selling at $602.50 each because the bondholders' required rate of return is 15%. The bonds pay interest semiannually and they will mature after 10 years. Find the coupon rate of these bonds. 7.2% ♥ 3.19. Armstrong Company bonds have 7% coupon rate, they pay interest semiannually, and they will mature after 12 years. In the bond market, these bonds are selling at $900 each. If your required rate of return is 8%, would you buy one of these bonds? B = $923.77, yes. 3.20. Suppose you want to buy a PP&L bond with coupon 18.75% that matures in 5 years, and pays interest semiannually. If the face value of this bond is $1,000, and your required rate of return is 12%, how much should you pay for this bond? $1,248.40 ♥ 3.16. The investors require 8% return on Keitel Corporation 5s2024 bonds that pay interest semiannually. Find the price of one of these bonds in 2011. $760.26 ♥ 3.17. Adapazari Company 7% coupon bonds pay interest semiannually. When you bought one of these bonds, it had 11 years to maturity, and the appropriate discount rate was 9%. After one year, the discount rate on such bonds is 8% because of the improved financial health of the company. If you sell the bond today, what would be your capital gain or loss? $69.89 gain ♥ 3.18. Zeller Co bonds are selling at $602.50 each because the bondholders' required rate of return is 15%. The bonds pay interest semiannually and they will mature after 10 years. Find the coupon rate of these bonds. 7.2% ♥ 3.19. Armstrong Company bonds have 7% coupon rate, they pay interest semiannually, and they will mature after 12 years. In the bond market, these bonds are selling at $900 each. If your required rate of return is 8%, would you buy one of these bonds? B = $923.77, yes. 3.20. Suppose you want to buy a PP&L bond with coupon 18.75% that matures in 5 years, and pays interest semiannually. If the face value of this bond is $1,000, and your required rate of return is 12%, how much should you pay for this bond? $1,248.40 ♥
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Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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