The Garraty Company just issued a 10-year coupon bond, paying 8% coupon interest and the coupon...

The Garraty Company just issued a 10-year coupon bond, paying 8% coupon interest and the coupon interest will be paid semi-annually. Assume investors’ required rate of return is 6%. What’s the value of this bond?

Expert Solution

Calculating Price of Bond,

Using TVM Calculation,

PV = [FV = 1,000, PMT = 40, N = 20, I = 0.06/2]

PV = $1,148.77

jeff jeffy answered 2 years ago

Consider a 30-year U.S. bond paying 8 percent coupon. The interest is 10 percent. Find the...

Consider a 30-year U.S. bond paying 8 percent coupon. The interest is 10 percent. Find the bond’s Macaulay duration? Find the bond’s Modified duration.? If the interest rate falls by 10 basis points, what is the exact percentage change in the bond price? If the interest rate falls by 10 basis points, what is the approximate percentage change in the bond price?

"Company A has just issued a callable (at par) 8 year, 12% coupon bond with annual...

"Company A has just issued a callable (at par) 8 year, 12% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $107 per $100 face value. What is the bond's yield to call?

ACC Company issued a 10-year, 8%, $1,000,000 bond on Jan 1, 2009. The bond pays interest...

ACC Company issued a 10-year, 8%, $1,000,000 bond on Jan 1, 2009. The bond pays interest every December 31, with the principal to be paid at the end of 10 years. The market interest rate (effective interest rate) on Jan 1, 2009 was 5%. The market interest rate on December 31,2012 was 4%. (1) Compute the Book value of bonds liability on January 1, 2012. (2) Record the journal entry about interest expense on December 31, 2012.

A 13 year maturity, 10% coupon bond paying coupons semiannually is callable in 8 years at...

A 13 year maturity, 10% coupon bond paying coupons semiannually is callable in 8 years at a call price of $1,225. The bond currently sells at a yield to maturity of 9%. (Do not round answers) A.) What is the yield to call? B.) What is the yield to call if the call price is $1,175? C.) What is the yield to call if the call price is $1,225, but can be called in 4 years instead of 8?

a)XYZ company has just issued a 30-year bond with a coupon rate of 7.50% (annual coupon...

a)XYZ company has just issued a 30-year bond with a coupon rate of 7.50% (annual coupon payments) and a face value of $1,000. If the yield to maturity is 11%, what is the price of the bond? Round to the nearest cent. b) Suppose a zero-coupon bond with 11 years to maturity and $1,000 face value has a yield to maturity of 6%, what the is price of the bond? $________ (Round to the nearest cent.)

Joseph's Company has just issued a 20-year, 9 percent coupon rate, $1,000-par bond that pays interest...

Joseph's Company has just issued a 20-year, 9 percent coupon rate, $1,000-par bond that pays interest semiannually. Two years later, if the going rate of interest on the bond falls to 8 percent, what is the value of the bond? a. $1,225.62 b. $1,135.90 c. $1,094.54 d. $1,116.52 e. $1,012.38

General Electric has just issued a callable (at par) 10-year, 5.7 % coupon bond with annual...

General Electric has just issued a callable (at par) 10-year, 5.7 % coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $ 101.87. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst?

A 15 year bond is issued with a face value of 5000, paying interest of 300...

A 15 year bond is issued with a face value of 5000, paying interest of 300 a year. If yields to maturity increase shortly after t bond is issued, what happens to the bond . Coupon rate ? .. price ?

Last year, a company issued a 10-year annual coupon bond at par value with a yield...

Last year, a company issued a 10-year annual coupon bond at par value with a yield to maturity of 10.20%. The current yield to maturity has increased to 10.50%. Investors anticipate another increase in yield to maturity over the next 12 months to 10.80%. If the investors forecast accurately, what will be the rate of return on an investment in this bond over the next year? (Do not round intermediate calculations. Enter your final answer as a percent rounded to...

Madison Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest...

Madison Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 11%, and the company is certain it will remain at 11% until the bond matures in 15 years. Assuming that the required return does remain at 14% until maturity, find the value of the bond with (1) 15 years, (2) 12 years, (3) 9 years, (4) 6 years, (5) 3 years, and (6) 1 year to maturity. Plot your...

Question