A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...

A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par value. The bond has a coupon rate of 6 percent paid annually and matures in 16 years. What is the yield to maturity of this bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

FINANCIAL CALCULATOR CALCULATIONS ONLY

Expert Solution

YTM of Bond is the rate at which PV of Cash Inflows are equal to Bond Price.

Year	CF	PVF @6%	Disc CF	PVF @7%	Disc CF
0	¥ -93,000.00	1.0000	¥-93,000.00	1.0000	¥-93,000.00
1	¥ 6,000.00	0.9434	¥ 5,660.38	0.9346	¥ 5,607.48
2	¥ 6,000.00	0.8900	¥ 5,339.98	0.8734	¥ 5,240.63
3	¥ 6,000.00	0.8396	¥ 5,037.72	0.8163	¥ 4,897.79
4	¥ 6,000.00	0.7921	¥ 4,752.56	0.7629	¥ 4,577.37
5	¥ 6,000.00	0.7473	¥ 4,483.55	0.7130	¥ 4,277.92
6	¥ 6,000.00	0.7050	¥ 4,229.76	0.6663	¥ 3,998.05
7	¥ 6,000.00	0.6651	¥ 3,990.34	0.6227	¥ 3,736.50
8	¥ 6,000.00	0.6274	¥ 3,764.47	0.5820	¥ 3,492.05
9	¥ 6,000.00	0.5919	¥ 3,551.39	0.5439	¥ 3,263.60
10	¥ 6,000.00	0.5584	¥ 3,350.37	0.5083	¥ 3,050.10
11	¥ 6,000.00	0.5268	¥ 3,160.73	0.4751	¥ 2,850.56
12	¥ 6,000.00	0.4970	¥ 2,981.82	0.4440	¥ 2,664.07
13	¥ 6,000.00	0.4688	¥ 2,813.03	0.4150	¥ 2,489.79
14	¥ 6,000.00	0.4423	¥ 2,653.81	0.3878	¥ 2,326.90
15	¥ 6,000.00	0.4173	¥ 2,503.59	0.3624	¥ 2,174.68
16	¥ 6,000.00	0.3936	¥ 2,361.88	0.3387	¥ 2,032.41
16	¥1,00,000.00	0.3936	¥ 39,364.63	0.3387	¥ 33,873.46
NPV			¥ 7,000.00		¥ -2,446.65

YTM = rate at which least +ve NPV + { NPV at that rate / Chnage in NPV due to 1% inc in Disc Rate ] * 1%

= 6% + [ 7000 / 9446.65 ] * 1%

= 6% + 0.74%

= 6.74%

jeff jeffy answered 1 month ago

A Japanese company has a bond outstanding that sells for 106 percent of its ¥100,000 par...

A Japanese company has a bond outstanding that sells for 106 percent of its ¥100,000 par value. The bond has a coupon rate of 5.4 percent paid annually and matures in 11 years. What is the yield to maturity of this bond?

A japanese comapny has a bond outstanding that sells for 91.53 percent of its 100,000 par...

A japanese comapny has a bond outstanding that sells for 91.53 percent of its 100,000 par value. The bond has a coupon rate of 3.4 percent paid annually and matures in 16 years. What is the yield to maturity of this bond? Settlement date = 1/1/2000 Maturity date = 1/1/2016 Annual coupon rate = 3.4% Coupons per year = 1 Face value (% of par) = 100 Bond price (% of par) = 91.530 Face value = 100,000 Please answer...

The Corner Grocer has 7-years , 6 percent annual coupon bond outstanding with a 1,000 par...

The Corner Grocer has 7-years , 6 percent annual coupon bond outstanding with a 1,000 par value . the bond has a yield to maturity of 5.5 percent . which one of the following statements is correct if the market yield suddenly increases 6.5 percent?

Applied Software has a $1,000 par value bond outstanding that pays 20 percent interest with annual...

Applied Software has a $1,000 par value bond outstanding that pays 20 percent interest with annual payments. The current yield to maturity on such bonds in the market is 9 percent. Compute the price of the bonds for these maturity dates: (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answers to 2 decimal places.) Price of the bond a. 30 years $ b. 18 years $ c. 4 years $

The Corner Grocer has an 8-year, 7 percent annual coupon bond outstanding with a $1,000 par...

The Corner Grocer has an 8-year, 7 percent annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 6.4 percent. Which one of the following statements is correct if the yield to maturity suddenly increases to 7.3 percent? a. The bond price will decrease by $55.21. b. The bond price will increase by 5.25 percent. c. The bond price will decrease by 5.11 percent. d. The bond price will increase by $58.69. e....

Midland Utilities has a bond issue outstanding that will mature to its $1,000 par value in...

Midland Utilities has a bond issue outstanding that will mature to its $1,000 par value in 19 years. The bond has a coupon interest rate of 11% and pays interest annually. a. Find the value of the bond if the required return is (1) 11%, (2) 15%, and (3) 8%. b. Use your finding in part a and the graph here, to discuss the relationship between the coupon interest rate on a bond and the required return and the market...

Bella Donna Company has 100,000 shares of $4 par common stock issued and outstanding as of...

Bella Donna Company has 100,000 shares of $4 par common stock issued and outstanding as of January 1, 2018. The shares were originally issued for $9 per share. On February 3, 2018, Bella Donna repurchased 3,690 shares at $6 per share for the purposes of retiring them. What will be the balance in Paid in capital in excess of par after February 3rd transaction? PLEASE SHOW ALL WORK AND EXPLAIN, THANK YOU

Consider the following information: 1) Bonds outstanding: 80,000. Each bond sells at its $1,000 par value....

Consider the following information: 1) Bonds outstanding: 80,000. Each bond sells at its $1,000 par value. The bonds are priced to provide a YTM of 8.6 percent. 2) Stock outstanding: 4 million shares. Current stock price = $40 per share. Book value = $28 per share. Current stock beta = 1.1. 3) The risk-free rate is 4%, the tax rate is 34%, and the expected return on the market portfolio is 12%. What is the weighted average cost of capital...

a. Company x has 25,000 bonds outstanding that trade at par value (each bond has a...

a. Company x has 25,000 bonds outstanding that trade at par value (each bond has a par value of $1,000). Companies with similar characteristics have their bonds trading at a yield of 5.5%. The company also has 2 million shares of common stock outstanding. The stock has a beta of 1.2 and sells for $50 a share. The risk free rate is 2% and the market risk premium is 5%. The company’s tax rate is 30%. What is the company’s...

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 10 percent annual interest....

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 10 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)...

Question