On January 15, 2012, TEX Consulting, Inc. issued some $1000 par value bonds. These bonds have...

On January 15, 2012, TEX Consulting, Inc. issued some $1000 par value bonds. These bonds have a coupon rate of 8.25% and the coupon payments are quarterly. On the original issue date, the bonds had 30 years to maturity and the original YTM on these bonds was 8.75%. Exactly one year after issue, these bonds traded at a price that resulted in a YTM of 6.25%. If you had bought one of these bonds on the issue date and sold the bond exactly one year later, what was your percentage capital gain or loss?

Expert Solution

jeff jeffy answered 8 months ago

On January 1, 2015, Shea Company issues 700 bonds, 15 years (1000 par value bonds at...

On January 1, 2015, Shea Company issues 700 bonds, 15 years (1000 par value bonds at 97) with a coupon rate of 6% and maturing in 2030. The straight line method is used to amortize any bond discount or premium on a semi-annual basis. Be sure to label the discount or premium as: discount on bonds within long-term liability or premium on bonds within long-term liability (the discount r premium in the system relates to the sale of inventory and...

Exactly, eight years ago, Milfred, Inc. issued some $15,000 par value bonds. When issued, the bonds...

Exactly, eight years ago, Milfred, Inc. issued some $15,000 par value bonds. When issued, the bonds had a life of 30 years, paid coupon interest semiannually, and sold at par value. Today, the bonds sell for a price equal to 92 percent of par value (i.e., 92% of $15,000) and the yield to maturity on these bonds is 7.1%. What is the coupon rate of these bonds?

Earlier today, Alpha-Beta Inc. issued convertible bonds with $1000 par value and a conversion ratio of...

Earlier today, Alpha-Beta Inc. issued convertible bonds with $1000 par value and a conversion ratio of 20. What is the most likely market price for Alpha-Beta’s common stock currently? a.Less than $50 b.Between $50 and $100 c.$50 d.More than $100

OBJ Inc. issued $1000 par value, 17-year bonds at a coupon rate of 10.8 percent. These...

OBJ Inc. issued $1000 par value, 17-year bonds at a coupon rate of 10.8 percent. These bonds were issued 2 years ago. These bonds currently sell for 97 percent of par value and make semiannual payments. What is the YTM?

BankMart Inc. recently issued bonds that mature in 8 years. They have a par value of...

BankMart Inc. recently issued bonds that mature in 8 years. They have a par value of $1,000 and an annual coupon of 4%. Your required rate of return is 10%. Hint: This bond pays a fixed amount of coupon at the end of each period and pays the par value when it matures. annual coupon payment = par value * annual coupon rate. What is the maximum price you want to pay for the bond?

On June 30, 2012, Bramble Company issued 12% bonds with a par value of $740,000 due...

On June 30, 2012, Bramble Company issued 12% bonds with a par value of $740,000 due in 20 years. They were issued at 99 and were callable at 103 at any date after June 30, 2020. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2021, and to issue new bonds. New 8% bonds were sold in the amount of $1,000,000 at 102; they...

MCQ: Legacy Inc. recently issued bonds that mature in 10 years. They have a par value...

MCQ: Legacy Inc. recently issued bonds that mature in 10 years. They have a par value of $1,000 and annual coupon of 6%. The current market interest rate is 8.5%. If the bonds pay interest semiannually, what will be the price of the bonds? Select one: a. 582.73 b. 833.82 c. 782.42 d. 1200.85 e. 1125.75

On January 1, 2018, ABC Inc. had issued $1,200,000 par value, 7%, five-year bonds at a...

On January 1, 2018, ABC Inc. had issued $1,200,000 par value, 7%, five-year bonds at a price of $1,251,176. Interest was payable semiannually on June 30 and December 31. The market rate of interest was 6% on the date the bond were issued. On March 1, 2019, ABC Inc. extinguished 40% of the bonds outstanding by issuing 15,000 of its common shares. It also paid in cash all interest due up to March 1, 2019 on these bonds. The market...

Here are data on $1000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley....

Here are data on $1000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions: a. Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows: Microsoft, 6.5 percent; GE Capital,16.5 percent; and Morgan Stanley, 10 percent; where: MICROSOFT GE CAPITAL MORGAN STANLEY Coupon interest rate 5.25% 7.25% 8.00% Years to maturity; Microsoft 31. GE; 26 Morgan...

X Company issued at par 4-year term bonds with a par value of $100,000, dated January...

X Company issued at par 4-year term bonds with a par value of $100,000, dated January 1, 2020, and bearing interest at an annual rate of 6 percent payable annually on December 31. At the time of issue, the market rate for such bonds is 9 percent. X amortizes the discount or premium using effective interest rate method. Required: 1- Compute the selling price of bond. 2- Record the journal entry. 3- Prepare schedual of amortization. 4- Record the adjusting...

Question