Question
In: Finance
Liam Investment Co purchases $100,000 par of 20-year Corporate bonds that have a Flat (Clean) price...
Liam Investment Co purchases $100,000 par of 20-year Corporate bonds that have a Flat (Clean) price of $97.50 (97.50% of par) for a value of $9,750. Janie's buys this bond in the middle of the coupon period and the bond has accrued $812.50 in accrued interest.
What is the Full (dirty) value of the bond - i.e. how much cash does Janie's Investment company need to pay the seller?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Shawn issues $100,000 10 % par value bonds for $96,156. The bonds have a 4 year...
Shawn issues $100,000 10 % par value bonds for $96,156. The bonds
have a 4 year life with semiannual interest payments. Record the
entry on the issue date, the first interest payment, and the entry
to retire the bonds. What will be the total interest payments for
this bond?
Capital Co. is currently issuing both 20-year and 30-year bonds at par. The bonds pay 7...
Capital Co. is currently issuing both 20-year and 30-year bonds
at par. The bonds pay 7 percent annual interest and have face
values of $1,000. You decide to purchase one of each of these bonds
and hold them for ten years. Assume that the yield to maturity on
each of these bonds is 9.6 percent ten years from now.
-determine the percent price appreciation on the 20-year bond
and percent price appreciation on the 30-year bond.
Which bond has a...
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%....
On January 1, a company purchased 3%, 20-year corporate bonds for $69,057,808 as an investment. The...
On January 1, a company purchased 3%, 20-year corporate bonds
for $69,057,808 as an investment. The bonds have a face amount of
$80 million and are priced to yield 4%. Interest is paid
semiannually. Prepare a partial amortization table at the effective
interest rate on June 30 and December 31. Prepare the journal
entries necessary to record revenue at the effective interest rate
on June 30 and December 31.
Period-End
Cash Interest Received
Bond Interest Revenue
Discount Amortization
Carrying Value...
One year ago, XYZ Co. issued 18-year bonds at par. The bonds have a coupon rate...
One year ago, XYZ Co. issued 18-year bonds at par. The bonds
have a coupon rate of 5.82 percent, paid semiannually, and a face
value of $1,000. Today, the market yield on these bonds is 7.51
percent. What is the percentage change in the bond price over the
past year? Answer to two decimals
Question 9 One year ago, XYZ Co. issued 16-year bonds at par. The bonds have a...
Question 9
One year ago, XYZ Co. issued 16-year bonds at par. The bonds
have a coupon rate of 6.49 percent, paid semiannually, and a face
value of $1,000. Today, the market yield on these bonds is 6.85
percent. What is the percentage change in the bond price over the
past year? Answer to two decimals
Question 10
Suppose ABC Co. issues $18.37 million of 17 year zero coupon
bonds today. If investors require a return of 6.18 percent
compounded...
One year ago, XYZ Co. issued 11-year bonds at par. The bonds have a coupon rate...
One year ago, XYZ Co. issued 11-year bonds at par. The bonds
have a coupon rate of 6.29 percent, paid semiannually, and a face
value of $1,000. Today, the market yield on these bonds is 7.31
percent. What is the percentage change in the bond price over the
past year? Answer to two decimals
X Company issued at par 4-year term bonds with a par value of $100,000, dated January...
X Company issued at par 4-year term bonds with a par value of
$100,000, dated January 1, 2020, and bearing interest at an annual
rate of 6 percent payable annually on December 31. At the time of
issue, the market rate for such bonds is 9 percent. X amortizes the
discount or premium using effective interest rate method.
Required:
1- Compute the selling price of bond.
2- Record the journal entry.
3- Prepare schedual of amortization.
4- Record the adjusting...
X Company issued at par 4-year term bonds with a par value of $100,000, dated January...
X Company issued at par 4-year term bonds with a par value of
$100,000, dated January 1, 2020, and bearing interest at an annual
rate of 6 percent payable annually on December 31. At the time of
issue, the market rate for such bonds is 9 percent. X amortizes the
discount or premium using effective interest rate method.
Required:
Compute the selling price of bond.
Record the journal entry.
Prepare schedual of amortization.
Record the adjusting entries for all years....
Three years ago, the Fairchildress Co. issued 20-year, 7.75 percent semiannual coupon bonds at par. Today,...
Three years ago, the Fairchildress Co. issued 20-year, 7.75
percent semiannual coupon bonds at par. Today, the bonds are quoted
at 102.6. What is this firm's pretax cost of debt?
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