Question
In: Finance
A company's bonds will mature in 20 years and have a face value of $1,000, a...
A company's bonds will mature in 20 years and have a face value of $1,000, a 6.25% coupon rate paid semiannually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,090. What is their yield to maturity? What is their yield to call? What is the after-tax cost of debt on these bonds if they are not called and the tax rate is 25%?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Thatcher Corp. bonds will mature in 20 years and have a face value of $1,000, a...
Thatcher Corp. bonds will mature in 20 years and have a face
value of $1,000, a 6.25% coupon rate paid semiannually. The price
of the bonds is $1,100. The bonds are callable in 5 years at a call
price of $1,090. What is their yield to maturity? What is their
yield to call? What is the after-tax cost of debt on these bonds if
they are not called and the tax rate is 25%?
The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and...
The Garcia Company’s bonds have a face value of $1,000, will
mature in 10 years, and carry a coupon rate of 19.0 percent. Assume
interest payments are made semiannually.
a. Determine the present value of the bond’s cash flows if the
required rate of return is 19.0 percent. (Round factor
value calculations to 5 decimal places, e.g. 0.52755. Round other
intermediate calculations to 2 decimal places, e.g. 52.75. Round
final answer to nearest dollar amount.) !!!!!ANSWER IS
$1,000!!!!
b. How...
Question 1 XYZ's corporate bonds mature in 20 years, have a par value of $1,000, and...
Question 1
XYZ's corporate bonds mature in 20 years, have a par value of
$1,000, and an annual coupon rate of 8% (paid on an annual basis).
The market requires an interest rate of 7% (annual) on these bonds.
What is the bond's price (report answer as a positive number)?
$1,066.32
$1,118.01
$1,241.89
$1,105.94
None of the above.
Question 2
A corporate bond has a maturity of ten years, face value of
$1,000, and an annual coupon rate of 6.75%....
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 20 years. Their...
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and
they mature in 20 years. Their nominal yield to maturity is 8.75%,
they pay interest semiannually, and they sell at a price of $875.
What is the bond's nominal (annual) coupon interest rate? Enter
your answer rounded to two decimal places. Do not enter % in the
answer box. For example, if your answer is 0.12345 or 12.345% then
enter as 12.35 in the answer box.
The Morrissey Company's bonds mature in 7 years, have a parvalue of $1,000, and make...
The Morrissey Company's bonds mature in 7 years, have a par
value of $1,000, and make an annual coupon payment of $70. The
market interest rate for the bonds is 8.5%. What is the bond's
price?
A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 8 years with a $1,000 face
value, have an 11% semiannual coupon, are callable in 4 years at
$1,146.32, and currently sell at a price of $1,269.54. What are
their nominal yield to maturity and their nominal yield to call? Do
not round intermediate calculations. Round your answers to two
decimal places.
A firm's bonds have a maturity of 10 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 10 years with a $1,000 face
value, have an 8% semiannual coupon, are callable in 5 years at
$1,057.09, and currently sell at a price of $1,108.89. What are
their nominal yield to maturity and their nominal yield to call? Do
not round intermediate calculations. Round your answers to two
decimal places.
YTM: %
YTC: %
What return should investors expect to earn on these bonds?
Investors would not expect the bonds to be called...
A firm's bonds have a maturity of 12 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 12 years with a $1,000 face
value, have an 11% semiannual coupon, are callable in 6 years at
$1,200, and currently sell at a price of $1,348.76.
What is their nominal yield to maturity? Do not round
intermediate calculations. Round your answer to two decimal
places.
%
What is their nominal yield to call? Do not round intermediate
calculations. Round your answer to two decimal places.
%
What return should investors expect to...
A firm's bonds have a maturity of 14 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 14 years with a $1,000 face
value, have an 8% semiannual coupon, are callable in 7 years at
$1,062.23, and currently, sell at a price of $1,117.10.
1. What is their nominal yield to maturity?
2. What is their nominal yield to call?
A firm's bonds have a maturity of 14 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 14 years with a $1,000 face
value, have an 8% semiannual coupon, are callable in 7 years at
$1,075.62, and currently sell at a price of $1,139.11. What are
their nominal yield to maturity and their nominal yield to call? Do
not round intermediate calculations. Round your answers to two
decimal places.
YTM: %
YTC: %
What return should investors expect to earn on these bonds?
Investors would expect the bonds to be called and...
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