Dawgpound Incorporated has a bond trading on the secondary market that will mature in four years. The bond pays an annual coupon with a coupon rate of 5.00% and has a face value of $1,000.00. Based on the economy and risk associated with Dawgpound, you seek a 12.00% return on Dawgpound debt. What price are you willing to pay for the bond
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Dawgpound Incorporated has a bond trading on the secondary market that will mature in four years. The bond pays an annual coupon with a coupon rate of 5.00% and has a face value of $1,000.00. Based on the economy and risk associated with Dawgpound, you seek a 12.00% return on Dawgpound debt. What price are you willing to pay for the bond
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- Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?Your client is considering the purchase of a bond that is currently selling for $1058.15. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 27 years to maturity, pays a coupon rate of 7.8% (payments made semi-annually), and a face value of $1000, (Round to 100th of a percent and enter your answer as a percentage, e.g. 12.34 for 12.34%) Answer: CheckFor a company, you plan to buy the following bond: Time to maturity, 6 years; coupon rate, 8%; Coupon payment, annual; Market interest rate, 8%; Face value, $1,000. Using Excel, calculate the duration of the bond. Using Excel, calculate the accumulated value of invested payment(or receipt) when you find market interest rate a year later is now 8%, 9%, and 7%, respectively. Using Excel, calculate geometric average rate of return (or realized compound return).
- Dausin Design offers bonds with a coupon rate of 9 percent per year, paid semiannually. The yield to maturity is 3.5 percent and the maturity date is 10 years from today. What is the market price of this bond if the face value is $1,000?If a bond is issued at the price of $10,000 per contract and promises a 5.7% interest every year, the contract will be redeemed by the issuer at a discount after 8 years for $9,200. If the market is offering a return of 4.8% for similar risk securities, what would be the price you are ready to offer for this bond?You are employed by an investment bank to estimate the value of a coupon-paying bond with the following features. It has a face value of $100,000, pays quarterly coupons at a rate of 10% p.a. and the market required yield to maturity is 8% p.a. compounding quarterly. There is one full quarter until the next payment will be received and the bond matures in 4 years. Which of the following is closest to the market value of the bond? Group of answer choices A) $106,789 B) Need more information to answer the question C) $105,288 D) $93,473 E) $94,871
- Buner Corp’s outstanding bonds, which has a face value of $1,000, have 6 years remaining to maturity. The bond’s coupon rate of interest is 8%, and interest is paid semiannually. If investors require a rate of return equal to 6% to invest in similar risk bonds, what should be the market price of Buner’s bond?You are employed by an investment bank to estimate the value of a coupon-paying bond with the following features. It has a face value of $100,000, pays quarterly coupons at a rate of 10% p.a. and the market required yield to maturity is 8% p.a. compounding quarterly. There is one full quarter until the next payment will be received and the bond matures in 4 years. Which of the following is closest to the market value of the bond? A. $106,789 B. $105,288 C. $94,871 D.$93,473 E. Need more information to answer the question I calculated and I got $106,789, is it correct?GAMA Co.'s 15-year bonds have an annual coupon rate of 9.5%. Each bond has face value of $1,000 and makes semiannual interest payments. If you require an 11.0% nominal yield to maturity (YTM) on this investment, what is the maximum price you should be willing to pay for the bond? Is this bond selling at a premium or discount? What will happen to the price of the bond as you get closer to the maturity date? Please show work in excel
- You want to invest in a bond for one year, and are deciding between the following two choices - Bond A and Bond B, both of which have a maturity of 1 year and a par value of $1,000.Bond A is a regular(i.e., nominal- return) with a couponrate of 3% per year, payable semi-annually. The current price of Bond A is $998. Bond B is a real-return bond with a coupon rate of 2% per year, payable annually. The current price of Bond B is $1,000. What is the inflation rate (over the next year) that will make the (nominal) ratesof return of the two choices the same?Your client is considering the purchase of a bond that is currently selling for $1112.09. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 22 years to maturity, pays a coupon rate of 5.5% (payments made semi-annually), and a face value of $1000. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%)Your client is considering the purchase of a bond that is currently selling for $1148.18. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 14 years to maturity, pays a coupon rate of 2.5% (payments made semi- annually), and a face value of $1000. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%) Answer: