Question: Part 1 BOND VALUATION Rd is the required return on debt from an investor's view or the cost of debt from the company's view. Rd
Part 1 BOND VALUATION Rd is the required return on debt from an investor's view or the cost of debt from the company's view. Rd = YTM on a company's long term bond. Table 1 McDonald's Bond Data from FINRA Bond Results Ratings Co Bond 375 152033 104835 31 CORP Using the Bond data from FINRA in Table 1 above, answer the following questions When answering the questions, you may make the following assumptions A) Assume Semi-annual compounding and coupon payments B) Assume a face or par value equal to S1000 . Refer to Table 1, what is the coupon rate on the Bond? 2. Refer to Table, when does the bond mature (Years)? 3. Refer to Table 1, what is the current price of the Bond in S units. (Remember Bond prices are reported as percentages of face value.) 4. Calculate the current yield using the information you have available and the formula that follows Current Yield- Annual Coupon Payment/Current Price) *100
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