You own a 15 year bond that pays you $25.00 semi-annually. The face value is $1,000....

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You own a 15 year bond that pays you $25.00 semi-annually. The face value is $1,000. The current market price is $1,010.50. The bond matures in 6 years. a. What is the coupon rate? b. What is the yield to maturity? (fill in the following table). FV PMT (S/m) N (tm) PV I/Y (r/m) c. What is the current yield of this bond? d. Would this bond be a discount bond or a premium bond?, 2. (1pt) Marconia, Inc. has bonds in the market currently priced reflecting a 7.64% YTM. The face value is $1,000, the coupon rate is 6.5% paid quarterly, and there are 10 years until the bond matures. a. What is the price of the bond? (fill in the following table) FV PMT N (tm) 1/Y (r/m) PV b. If interest rates in the market decrease, what would happen to the price of this bond? 3. (1pt) Rocking Ball, Inc. is considering issuing bonds to raise money for a project expansion. They need $450,000 for the project. They would like to issue 10 year bonds with a $1,000 face value with a 5% coupon rate paid annually. If the market interest rate for a competitive offering now is 7.2%, approximately how many bonds would the company need to offer to raise the funds they need (ignore any issuance costs). Round UP to the next whole number. (Fill in the following table) FV PMT N (tm) I/Y (r/m) PV Bonds Needed You own a 15 year bond that pays you $25.00 semi-annually. The face value is $1,000. The current market price is $1,010.50. The bond matures in 6 years. a. What is the coupon rate? b. What is the yield to maturity? (fill in the following table). FV PMT (S/m) N (tm) PV I/Y (r/m) c. What is the current yield of this bond? d. Would this bond be a discount bond or a premium bond?, 2. (1pt) Marconia, Inc. has bonds in the market currently priced reflecting a 7.64% YTM. The face value is $1,000, the coupon rate is 6.5% paid quarterly, and there are 10 years until the bond matures. a. What is the price of the bond? (fill in the following table) FV PMT N (tm) 1/Y (r/m) PV b. If interest rates in the market decrease, what would happen to the price of this bond? 3. (1pt) Rocking Ball, Inc. is considering issuing bonds to raise money for a project expansion. They need $450,000 for the project. They would like to issue 10 year bonds with a $1,000 face value with a 5% coupon rate paid annually. If the market interest rate for a competitive offering now is 7.2%, approximately how many bonds would the company need to offer to raise the funds they need (ignore any issuance costs). Round UP to the next whole number. (Fill in the following table) FV PMT N (tm) I/Y (r/m) PV Bonds Needed

Answer rating: 100% (QA)

1 a Coupon rate Annual interest Face value 25 2 1000 5 b FV 1000 PMT Sm 25 N tm 12 P... View the full answer