Rascal Corporation bonds have a 11.0% coupon and a maturity value of $1,000. The bonds, which pay interest semi-annually, had a maturity of 15 years. If you require a pre-tax return of 8.0% on bonds with this risk, how much would you pay for one of these bonds after 4 years?
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Rascal Corporation bonds have a 11.0% coupon and a maturity value of $1,000. The bonds, which pay interest semi-annually, had a maturity of 15 years. If you require a pre-tax return of 8.0% on bonds with this risk, how much would you pay for one of these bonds after 4 years?
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- Rascal Corporation bonds have a 11.0% coupon and a maturity value of $1,000. The bonds, which pay interest semi - annually, had a maturity of 15 years. If you require a pre- tax return of 8.0% on bonds with this risk, how much would you pay for one of these bonds after 4 years?The ARA Corporation bonds have a coupon of 14%, pay interest semiannually, and they will mature in 7 years. Your required rate of return for such an investment is 10% annually. Required: (a) How much should an investor pay for a $1,000 ARA Corporation bond? (b) Discuss reasons why an investor should choose to purchase bonds over stocks given his risk profile.a. Tüpraş bonds have 5 years until maturity. The bonds have a 12.5% coupon, and they sell at $1100 apiece. Calculate their yield to maturity. b. Burns Co. 15s21 bonds are sold for $660. The bonds pay interest semiannually. If in 2001 your required rate of return for such bonds is 20%, would you buy Burns bonds?
- Crane, Inc., has four-year bonds outstanding that pay a coupon rate of 7.00 percent and make coupon payments semiannually. If these bonds are currently selling at $919.89. What is the yield to maturity that an investor can expect to earn on these bonds? What is the effective annual yeild?The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature in 7 years. Your required rate of return for such an investment is 10% annually. 1. How much should you pay for a $1,000 ARA Corporation bond? Use the bond equation formula.Rove Enterprises has bonds on the market making annual payments, with 10 years to maturity, and selling for $935. At this price, the bonds yield 6%. a) What is the value of the yearly coupon payment on Rove Enterprises' bonds? b) What must the coupon rate be on the bonds? c) Are the bonds of Rover Enterprises considered discount bonds or premium bonds and why?
- Renfro Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bonds is $1,100. What is the bond’s yield to maturity, current yield and capital gains yield? how to calculate in excelSprint has issued bonds that will mature in six years and pay an 8% coupon semiannually. If you paid $1,051.98 today and your required return was 6.6%, did you overpay? underpay? Or pay the fair price? Explain.Mechmar Corp Berhad bonds pay $70 in annual interest, with a $1,000 par value. The bonds mature in 17 years. Your required rate of return is 8.5% per year. Calculate the value of the bond and interpret your answer. In your opinion, does the bond value change if your required rate of return (k) increase to 11% per year and in another scenario decease to 6% per year?
- Solve by Formula. Three years ago, ABC Company issued 10-year bonds that pay 5% semiannually. a. If the bond currently sells for $1,045, what is the yield to maturity (YTM) on this bond? b. If you are expecting that the interest rate will drop in the near future and you want to gain profit by speculating on a bond, will you buy or sell this bond? Why?Balmar Corporation bonds have a $1,000 face value and will mature in 4 years. The bonds have a 7% coupon rate. Interest is paid annually and the required rate of return is 6 percent for these bonds. 1. What is the price of the Balmar corporate bonds? 2. What is the Macaulay duration of the Balmar corporate bonds? 3. What is the Modified duration of the Balmar corporate bonds? 4. If interest rates increase 50 basis points, what will be the new price for the Balmar bond?Enterprise, Inc. bonds have a 9 percent annual coupon rate. The interest is paid semiannually and the bond mature in eight years. Their par value is $1,000. If the market’s required yield to maturity on a comparable-risk bond is 8 percent, what is the value of the bond? What is its value if the interest is paid annually? How to calculate this using mathematical calculation with formulas in finance?