Question: HELP ME PLEASE! 2B) Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 7% with semiannual payments
HELP ME PLEASE!
2B) Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 7% with semiannual payments of $35, and a par value of $1,000. The price of each bond in the issue is $1,190.00. The bond issue is callable in 5 years at a call price of $1,070.
What is the bond's current yield? Round your answer to two decimal places. Do not round intermediate calculations. %
What is the bond's nominal annual yield to maturity (YTM)? Round your answer to two decimal places. Do not round intermediate calculations. %
What is the bond's nominal annual yield to call (YTC)? Round your answer to two decimal places. Do not round intermediate calculations. %
7-10)Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 8% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $908.30. The capital gains yield last year was - 9.17%.
What is the yield to maturity? Round your answer to two decimal places
b. For the coming year, what is the expected capital gains yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. %
7-15) Bond X is noncallable and has 20 years to maturity, a 10% annual coupon, and a $1,000 par value. Your required return on Bond X is 11%; and if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5, years the yield to maturity on a 15-year bond with similar risk will be 11%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.
7-18) Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 12% annual coupon payment, and their current price is $1,180. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).
What is the yield to maturity? Round your answer to two decimal places. %
What is the yield to call if they are called in 5 years? Round your answer to two decimal places. %
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
