Why is the remaining time to maturity an important factor in evaluating the impact of a change in yield to maturity on bond prices?
Answer to relevant QuestionsWhat factors might influence a firm’s price-earnings ratio?Exodus Limousine Company has $1,000 par value bonds outstanding at 10 percent interest. The bonds will mature in 50 years. Compute the current price of the bonds if the percent yield to maturity is:a. 5 percent.b. 15 percent.Using Table assume interest rates in the market (yield to maturity) are 14 percent for 20 years on a bond paying 10 percent.a. What is the price of the bond?b. Assume five years have passed and interest rates in the market ...Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of course is also the amount of principal to be paid at maturity. The bonds are currently selling for $690. They have 10 years remaining to ...Justin Cement Company has had the following pattern of earnings per share over the last five years: Year Earnings per Share2006 ............. $5.002007 ............ 5.302008 ............ 5.622009 ............ 5.962010 ...
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