Question: Please using these formula sheet to solved this problems. Thanks. Three years ago, you purchased a 30 year, $1,000 par value bond for a quoted

 Please using these formula sheet to solved this problems. Thanks. Three
years ago, you purchased a 30 year, $1,000 par value bond for
a quoted price of 95.0. The bond pays its 5% coupon semi-annually.
Please using these formula sheet to solved this problems. Thanks.

Three years ago, you purchased a 30 year, $1,000 par value bond for a quoted price of 95.0. The bond pays its 5% coupon semi-annually. a) If the present market rate on identical bonds is 4%, at what price should the bond trade today? b) If you sell your bond today for the price you calculated above, what is your EFFECTIVE ANNUAL HOLDING PERIOD RETURN over the 3-year period? Formula Sheet PV- FV (1+r) r PV - PV -- reg 1 (1+r) PVC r or or Pv----6) or EAR = [1 - 478) -- EPR= [1, 478)*-- EAR - - 1 (FV - MV)] Y7M FVMV 2 D D Prs r D P- D D+P P - PVCCATS - IdT d+r 10.5") (][0-3] (FV - MV) + YTM FV + MV D P. - r-8 D Pes + D D P.- D, + P (1+r)(1+r) (1+r) P- D 3 (1+r) IdT 11+0.5 S dr PVCCATS - d+r Financial Ratios Equity Multiplier = Total Assets / Total Equity Times Interest Earned = EBIT / Interest Inventory Turnover = Cost of Goods Sold / Inventory Total Asset Turnover = Sales/Total Assets Profit margin = Net Income / Sales Market-to-Book Ratio = Market Value per Share / Book Value per Share ROE = PM X TAT X EM

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