A corporation issues a 20 year bond with the final redemption value equal to the face...

A corporation issues a 20 year bond with the final redemption value equal to the face value of $1000, and semiannual coupons of 5%. However, the bond is callable at the end of 10 years at $1100, and at the end of 15 years at $1040. What is the price of the bond if the investor’s yield (the “yield-to-worst”) is 3%?

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jeff jeffy answered 1 month ago

A 20-year 10% semi-annual-coupon bond has a face (and redemption) value of $1,000. Find the price...

A 20-year 10% semi-annual-coupon bond has a face (and redemption) value of $1,000. Find the price of the bond, assuming a nominal annual interest rate of 12% convertible semiannually [I am not good at this class so a thorough write out on paper would be most beneficial to me] Answer: 849.54 [Provided on the homework, but i don't know how to solve]

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A 10-year bond has face value (redemption value) $600,000 and quarterly coupons of 4%. Consider the...

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A 20-year bond with a face value of P5,000 is offered for sale at P3,800. The...

A 20-year bond with a face value of P5,000 is offered for sale at P3,800. The rate of interest on the bond is 7%, paid semiannually. This bond is now 10 years old (the owner has received 20 semiannual interest payments). If the bond is purchased for P3, 800, what effective rate of interest would be realized on this investment opportunity?

Consider a bond with a $1000 face value, with a 20 year maturity and a coupon...

Consider a bond with a $1000 face value, with a 20 year maturity and a coupon rate of 8% which pays coupons with a semi-annual frequency. The 4th coupon payment will be received in 1 second. Calculate the value of the bond if the YTM is 4%, 6%, 8%, and 10% (APR with semi-annual compounding). Explain why there is a negative relation between bond price and YTM.

June 30th: The company issues a 5-year bond with a face value of $100,000 and a...

June 30th: The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 8%. Interest is due on June 30th each year. The market rate is 6% on the date of issuance. Prepare the Journal Entry for June 1st, and the journal entry to acrrue interest at year end. The effective interest method is used to amorize bond premiums and discounts.

Suppose the U.S. government issues a one-year bond with a face value of $1,000 and a...

Suppose the U.S. government issues a one-year bond with a face value of $1,000 and a zero coupon. (a) If interest rates on bank deposits are 3 percent, would we expect the yield of the bond to be greater than, less than, or equal to 3 percent? Explain intuitively why this is the case. (b) What will the market price of the bond be, given the yield? (c) Suppose the bond is sold for the price you calculated in part...

Company B issues a ten-year bond that has a face value (or par value) of $100,000...

Company B issues a ten-year bond that has a face value (or par value) of $100,000 and a stated rate of 4%. The interest is paid annually, the date is January 1, 2018 and the current market rate is 6%. What is the issue price of the bond (round to the nearest dollar)? Show your work (Using the preset tables)

Data on a bond: Face amount of bond : $1000 Terms of redemption: $1000 is redeemable...

Data on a bond: Face amount of bond : $1000 Terms of redemption: $1000 is redeemable after 10 years Coupon rate: 5% per year, payable semi-annually X = Premium if the effective annual yield to maturity is 4% Y = Discount if the effective annual yield to maturity is 6% Compute the difference X minus Y

Company A issues a bond with a $100,000 face value. The bond matures in three years....

Company A issues a bond with a $100,000 face value. The bond matures in three years. The stated interest rate is 9% and the market interest rate is 12%. Interest payments are made every 6 months. Record the journal entry for the issuance of the bond.

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