Do the Math 14-6 Yield, Price, and YTM A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $990 and it now selling for $1,020. a. What is its current yield? Round your answer to one decimal place. 9.70 b. What will be its selling price in two years if comparable màrket interest rates drop 1.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to fou decimal places. Round your answer to the nearest cent. %
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- Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?Question A .Your company currently has $1,000 par, 6.25% coupon bonds with 10 years to maturity and a price of $1,071. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set? Assume that for both bonds, the next coupon payment is due in exactly six months. You need to set a coupon rate of _ % (Fill in the _) Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this lineDo the Math 14-6 Yield, Price, and YTM A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $980 and it now selling for $1,030. a. What is its current yield? Round your answer to one decimal place. 9.4 % b. What will be its selling price in two years if comparable market interest rates drop 3.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest cent. c. Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your answer to two decimal places. %
- Q.A $35,000, 5% bond that matures in 10 years has interest payable semiannually. If the quoted price is $36,500, what is the yield rate? Cannot use Excel or a financial calculator. Please show step by step work.eston Help A firm raises capital by selling $28,000 worth of debt with flotation costs equal to 1% of its par value. If the debt matures in 15 years and has an annual coupon interest rate of 7%, what is the bond's YTM? The bond's YTM is %. (Round to two decimal places.) Тext dia Librai l Calculat r Resource Enter your answer in the answer box and then click Check Answer. ic Study Check Answer Clear All es All parts showing nunication Tools > This course (Introduction to Finance (EIN-101-D02) Distance Spring 2021) is hased on 7utter/Smart- Drincinles of Managerial Finance Rrief Re 4/1. P Type here to search insertces A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8.40% with interest paid annually. If the current market price is $840, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Capital gain
- Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. ___________% b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.____________% 2. Assume that the risk-free rate is 6% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 1.5? Round your answer to two decimal places.A bond that matures in 10 years has a $1,000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 13 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? Question content area bottom Part 1 a. The value of this bond if it paid interest annually would be $enter your response here.Give typing answer with explanation and conclusion Consider two Bonds with $1,000 face value: 10-year and 30-year maturity. Both Bonds offer 10% annual coupon, paid once a year. Assume that interest rates, hence YTM (Yield to Maturity) changed from 4% to 5%. How much will be the percentage change in the 30-year Bond price? Enter your answer in the following format: + or - 0.1234 Hint: Answer is between -0.1175 and -0.1465
- A firm raises capital by selling $10,000 worth of debt with flotation costs equal to 2% of its par value. If the debt matures in 10 years and has an annual coupon interest rate of 11%, what is the bond's YTM? Question content area bottom Part 1 The bond's YTM is enter your response here%. (Round to two decimal places.)Yield to Maturity and Required Returns The Brownstone Corporation's bonds have 6 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 9%. What is the yield to maturity at a current market price of $807? Round your answer to two decimal places. % What is the yield to maturity at a current market price of $1,113? Round your answer to two decimal places. % Would you pay $807 for one of these bonds if you thought that the appropriate rate of interest was 12% - that is, if rd = 12%.-Select-Yes or No Explain your answer. I. You would buy the bond as long as the yield to maturity at this price does not equal your required rate of return.II. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return.III. You would buy the bond as long as the yield to maturity at this price equals your required rate of return.-Select-I II IIIA corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $980 and it is now selling for $1,010. a) What will be its selling price in two years if comparable market interest rates drop 1.9 percentage points?