In: Finance
Please answer all 4 parts of this question
John Johnson just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Crane Corp. that pays an annual coupon rate of 5.0 percent. If the current market rate is 9.00 percent, what is the maximum amount John should be willing to pay for this bond?
Sheridan, Inc., has issued a three-year bond that pays a coupon
rate of 8.5 percent. Coupon payments are made semiannually. Given
the market rate of interest of 4.2 percent, what is the market
value of the bond? (Round answer to 2 decimal places,
e.g. 15.25.)
Pharoah Inc. has seven-year bonds outstanding that pay a 12 percent coupon rate. Investors buying these bonds today can expect to earn a yield to maturity of 6.350 percent. What is the current value of these bonds? Assume annual coupon payments.
Sharon Lee is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 9.7 percent. Assume annual coupon payments. What is the current value of this bond? (Round answer to 2 decimal places, e.g. 15.25.)
As nothing was mentioned excel is used. If you need with “financial formula”, let me know, will do that also. Thank you |