Up and Coming Yoga has an outstanding bond issue that is currently selling for $945.55 The...

Up and Coming Yoga has an outstanding bond issue that is currently selling for $945.55 The bond pays a semi-annual coupon at an annual rate of 8.55% and matures in 19 years. Using approximate formulas, what is the modified duration and convexity of this bond? Using duration and convexity measures you computed, calculate the change in price of this bond if the yield goes up by 30 basis points.

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jeff jeffy answered 2 years ago

GE has an outstanding bond issue that is currently selling for $110.21 to yield 6.59%. The...

GE has an outstanding bond issue that is currently selling for $110.21 to yield 6.59%. The bond pays a semi-annual coupon of 8% and will mature in 10 years. Find the convexity of this bond using the approximate convexity formula. (You may use 10 basis point change in yield to approximate the convexity).

Campbell, Inc., has a $1,000 face value convertible bond issue that is currently selling in the...

Campbell, Inc., has a $1,000 face value convertible bond issue that is currently selling in the market for $990. Each bond is exchangeable at any time for 24 shares of the company’s stock. The convertible bond has a 6.9 percent coupon, payable semiannually. Similar nonconvertible bonds are priced to yield 9 percent. The bond matures in 10 years. Stock in the company sells for $40 per share. a-1. What is the conversion ratio? a-2. What is the conversion price?...

Mom's Apple Pies has an 8 percent semiannual coupon bond issue outstanding that is selling for...

Mom's Apple Pies has an 8 percent semiannual coupon bond issue outstanding that is selling for 102 percent of par and which matures in 20 years. If Mom's faces an average tax rate of 27%, what will be the after-tax cost of debt?

Madison Square Stores has a $20 million bond issue outstanding that currently has a market value...

Madison Square Stores has a $20 million bond issue outstanding that currently has a market value of $19.4 million. The bonds mature in 6.5 years and pay semiannual interest payments of $35 each. What is the firm's pretax cost of debt? 7.74 percent 7.80 percent 7.59 percent 7.08 percent 8.21 percent

CSM Corporation has a bond issue outstanding at the end of the year. The bond has...

CSM Corporation has a bond issue outstanding at the end of the year. The bond has 15 years remaining to maturity and carries a coupon interest rate of 6%. Interest on the bond is compounded on a semiannual basis. The par value of the CSM bond is $1,000 and it is currently selling for $874.42. a. Solve for the yield to maturity. Show your work. b. Solve for the price of the bond if the yield to maturity is 2%...

Tiny Tots has debt outstanding, currently selling for $830 per bond. It matures in 12 years,...

Tiny Tots has debt outstanding, currently selling for $830 per bond. It matures in 12 years, pays interest annually, and has a 12% coupon rate. Par is $1000, and thefirm’s tax rate is 40%.What is theafter-tax cost of debt?

A bond currently is selling for $1,006. The bond has a $1,000 maturity value and a...

A bond currently is selling for $1,006. The bond has a $1,000 maturity value and a coupon rate equal to 7 percent, and it matures in eight years. Interest is paid annually. Compute the bond’s yield to maturity today.

MiCa Worldwide that has two bond issues outstanding, “A” and “B.” For bond issue A, there...

MiCa Worldwide that has two bond issues outstanding, “A” and “B.” For bond issue A, there are 10,000 notes, each with a face value of $1,000, an 8 percent annual coupon rate (coupons are paid semi-annually), 10 years to maturity, and a current yield to maturity of 9 percent. For bond issue B, there are 5,000 notes, each with a face value of $1,000, a 6 percent annual coupon rate (coupons are paid semi-annually), 5 years to maturity, currently selling...

Closter, Inc., has a bond issue with a face value of $1,000 that is coming due...

Closter, Inc., has a bond issue with a face value of $1,000 that is coming due in one year. The value of the company’s assets is currently $1,180. Ashok Vora, the CEO, believes that the assets in the company will be worth either $970 or $1,470 in a year. The going rate on one-year T-bills is 6 percent. a-1. What is the value of the company’s equity? a-2. What is the value of the debt? Suppose the company can reconfigure...

Buckeye Industries has a bond issue with a face value of $1,000 that is coming due...

Buckeye Industries has a bond issue with a face value of $1,000 that is coming due in one year. The value of the company’s assets is currently $1,140. Urban Meyer, the CEO, believes that the assets in the company will be worth either $970 or $1,430 in a year. The going rate on one-year T-bills is 6 percent. a-1. What is the value of the company’s equity? (Do not round intermediate calculations and round your answer to 2 decimal places,...

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