Prof provided the answer key but REQUIRES showing the solution/analysis using Excel functions/formulas STEP-BY-STEP. Thank you.

  

Answer Key:

PJ% = .2974, or 29.74% PK% = .2333, or 23.33%

Question:

Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 18 years to maturity, make semiannual payments, and have a YTM of 6 percent.

• If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?
• What if rates suddenly fall by 2 percent instead?
• What does this problem tell you about the interest rate risk of lower-coupon bonds?

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Q4.

Answer Key:

The company should set the coupon rate on its new bonds equal to the required return. Which is YTM = 6.29%

Question:

Uliana Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6 percent coupon bonds on the market with a par value of $1,000 that sell for $967, make semiannual payments, and mature in 20 years.

• What coupon rate should the company set on its new bonds if it wants them to sell at par?

Answer rating: 100% (QA)

Sure Ill provide you with stepbystep solutionsanalysis for the given questions using Excel functionsformulas Question 1 Bond J has a coupon rate of 3 percent Bond K has a coupon rate of 9 percent Both ... View the full answer