4. Han Corporation issues a bond which has a coupon rate of 8.6%, a yield to...

4. Han Corporation issues a bond which has a coupon rate of 8.6%, a yield to maturity of 10.4%, a face value of $1,000, and a market price of $990. What is the semiannual interest payment? Round to two decimal places.

5. A shipping company sold an issue of 20-year $1,000 par bonds to build new ships. The bonds pay 6% interest, compounded semiannually. Today's required rate of return is 8.5%. How much should these bonds sell for today? Round to two decimal places.

6. Atlantis Company issued bonds on January 1, 2006. The bonds had a coupon rate of 5.0%, with interest paid semiannually. The face value of the bonds is $1,000 and the bonds mature on January 1, 2028. What is the yield to maturity for these bonds on January 1, 2020 if the market price of the bond on that date is $960? Submit your answer as a percentage and round to two decimal places.

7. Consider a 12-year bond with face value $1,000 that pays an 8.6% coupon semi-annually and has a yield-to-maturity of 7.7%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to decrease by 0.60% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?)

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

SOLVED WITH BA II PLUS CALCULATOR

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

ABC Corporation issues a bond which has a coupon rate of 9.40%, a yield to maturity...

ABC Corporation issues a bond which has a coupon rate of 9.40%, a yield to maturity of 7.75%, a face value of $1,000, and a market price of $990. What is the semiannual interest payment? Round to two decimal places. Describe and interpret the assumptions related to the problem. Apply the appropriate mathematical model to solve the problem. Calculate the correct solution to the problem. ABC company sold an issue of 14-year $1,000 par bonds to build new ships. The...

Bond J has a coupon rate of 4% and Bond K has a coupon rate of...

Bond J has a coupon rate of 4% and Bond K has a coupon rate of 8%. Both bonds make semi-annual coupon payments, have a maturity of 20 years, and are priced to have a YTM of 6% (semi-annually compounded). Suppose YTM goes up by 1%; what will be the percentage changes in the price of the two bonds? What will be the percentage change if YTM goes down by 1%? Give an intuitive explanation for your results. Suppose you...

what is the yield to call of a bond that has a coupon rate of a...

what is the yield to call of a bond that has a coupon rate of a 10.25% payable semiannually, a yield to maturity of 9.75%. The bond has 12 years to maturity, 3 years to call and the call premium is two year's interest?

What is the coupon rate of an annual coupon bond that has a yield to maturity...

What is the coupon rate of an annual coupon bond that has a yield to maturity of 5.5%, a current price of $949.81, a par value of $1,000 and matures in 15 years? 6.33% 4.70% 3.07% 5.00%

Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of...

Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 14 percent. Both bonds have 17 years to maturity, a par value of $1,000, and a YTM of 8 percent, and both make semiannual payments. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as...

Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of...

Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 11 percent. Both bonds have 8 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond J? -22.82% -21.82% -20.82% -22.80% 31.22% If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond K? -19.77% -17.77% 39.84% -19.75%...

Bond J has a coupon rate of 4 percent and Bond K has a coupon rate...

Bond J has a coupon rate of 4 percent and Bond K has a coupon rate of 10 percent. Both bonds have 17 years to maturity, make semiannual payments, and have a YTM of 7 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal...

Calculate the yield to maturity on the following bonds: A 8.6 percent coupon (paid semiannually) bond,...

Calculate the yield to maturity on the following bonds: A 8.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915. An 5.7 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $911. An 7.7 percent coupon (paid annually) bond, with a $1,000 face value and 8 years remaining to maturity. The bond is selling at...

Find the convexity of a seven-year maturity, 8.6% coupon bond selling at a yield to maturity...

Find the convexity of a seven-year maturity, 8.6% coupon bond selling at a yield to maturity of 9.4%. The bond pays its coupons annually. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Convexity

Suppose a semiannual coupon bond with a 7% annualized coupon rate has an annual yield of...

Suppose a semiannual coupon bond with a 7% annualized coupon rate has an annual yield of 5% compounded semiannually. It matures in 10 years to its face of $10,000. 1)Compute the price. 2) What its modified duration?

Subjects