A 10-year GM bond has a 10% coupon rate and was issued 4 years ago. If...

A 10-year GM bond has a 10% coupon rate and was issued 4 years ago. If investors require a return of 12%, calculate the bond’s value. Show the (condensed) time line and key steps of two methods. For the NS method, show the abbreviated equation/expression.

Expert Solution

Year	CF	PVF@12%	DCF
5	10	0.892857143	8.928571
6	10	0.892857143	8.928571
7	10	0.892857143	8.928571
8	10	0.892857143	8.928571
9	10	0.892857143	8.928571
10	110	0.892857143	98.21429
		Value of Bond	142.8571

jeff jeffy answered 3 years ago

A 10-year bond was issued 2 years ago with a coupon rate of 12%. Coupons are...

A 10-year bond was issued 2 years ago with a coupon rate of 12%. Coupons are paid annually. If you can buy this bond today for $1166.04, what would be the yield to maturity if you held the bond for the remaining 8 years?

Hawk Enterprise issued 10- year bond 3 years ago at a coupon rate of 8.5%. The...

Hawk Enterprise issued 10- year bond 3 years ago at a coupon rate of 8.5%. The bonds make semi-annual payments. If the YTM on these bonds is 6 %, 9.5% and 8.5%, what is the current bond price for this YTM and classify its prices as a discount, premium or par value bond?

A firm issued a 30-year bond 5 years ago. It has a 7% coupon rate and...

A firm issued a 30-year bond 5 years ago. It has a 7% coupon rate and will pay semiannual coupons. If the bond has a face value of $1,000 and a 4.5% yield to maturity, what should be the price of the bond today? Group of answer choices $1,270.57 $1,372.93 $1,370.71 $1,374.11

4.XYZ Corporation issued 10-year bonds a year ago at a coupon rate of 10 percent. The...

4.XYZ Corporation issued 10-year bonds a year ago at a coupon rate of 10 percent. The bonds make semiannual payments. If the YTM on these bonds is 7 percent, what is the current bond price?

2 years ago, a company issued a 10-year, 9% coupon bond with a face value of...

2 years ago, a company issued a 10-year, 9% coupon bond with a face value of $1000. The bond makes quarterly coupon payments. Today, the bond yields APR of 10% compounded semi-annually. What is the price of the bond today? I asked this question earlier but the answer I got is wrong. I am trying to figure out how to do this question correctly. Thank you!

Problem 5-3 Bond Yields Skolits Corp. issued 10-year bonds 2 years ago at a coupon rate...

Problem 5-3 Bond Yields Skolits Corp. issued 10-year bonds 2 years ago at a coupon rate of 8.4 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM %

Three years ago, PurpX issued 10,000 bonds with the following specifications: 10-year bond with 10% coupon...

Three years ago, PurpX issued 10,000 bonds with the following specifications: 10-year bond with 10% coupon rate and $1000 face value. PurpX made its third coupon payment today with 7 more coupon payments as well as the face value left to be paid. The current market rate is 6%. One board member suggests to take advantage of the low rates and purchase back all the bonds to reissue them at 6% coupon rate. How much does PurpX need today to...

GM issued a $ 1,000, 30-year bond 5 years ago at 9 % interest. Comparable bonds...

GM issued a $ 1,000, 30-year bond 5 years ago at 9 % interest. Comparable bonds yield 6 % today. What should GM’ bond sell for now? Define each variable in the equation P = (D1 + P1) / (1 + R) Solve the NPV and solve for the Payback YR Cash Flow 0 -$26,000 1 11,000 2 14,000 3 11,000 with the required rate equal to 6% 4. Use the following tax brackets for taxable income: Bracket:...

Jiminy’s Cricket Farm issued a 30-year, 6 percent semiannual coupon bond 4 years ago. The bond...

Jiminy’s Cricket Farm issued a 30-year, 6 percent semiannual coupon bond 4 years ago. The bond currently sells for 105 percent of its face value. The company’s tax rate is 23 percent. The book value of the debt issue is $60 million. In addition, the company has a second debt issue, a zero coupon bond with 8 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 67 percent of par. A....

Jiminy’s Cricket Farm issued a 20-year, 7 percent semiannual coupon bond 4 years ago. The bond...

Jiminy’s Cricket Farm issued a 20-year, 7 percent semiannual coupon bond 4 years ago. The bond currently sells for 104 percent of its face value. The company’s tax rate is 23 percent. The book value of the debt issue is $55 million. In addition, the company has a second debt issue, a zero coupon bond with 10 years left to maturity; the book value of this issue is $30 million, and the bonds sell for 58 percent of par. a....

Question