In: Finance

The 12-year, $1,000 par value bonds of Waco Industries pay 12 percent interest annually. The market price of the bond is $1,135, and the market's required yield to maturity on a comparable-risk bond is 9 percent. Compute the bond's yield to maturity.

1. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.

Face Value of Bond = $1000

Annual Coupon Payment = $1000*12% = $120

No of years to maturity = 12 years

a). Current Market Price of Bond = $1135

Calculating the Yield to Maturity of Bond using Excel "RATE" Function:-

So,**the Yield to Maturity(YTM) of Bond is
10.02%**

b). Market Yield to Maturity on comparable bond is 9%

Calculating the Price of Bond using excel "PV" function:-

So, **Price of Bond based on Market Yield to Maturity on
comparable bond is $1,214.82**

The 16-year, $1,000 par value bonds of Waco Industries pay 11
percent interest annually. The market price of the bond is $945,
and the market's required yield to maturity on a comparable-risk
bond is 10 percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you given the market's
required yield to maturity on a comparable-risk bond.
c. Should you purchase the bond?

The 11-year, $1,000 par value bonds of Waco Industries pay 9
percent interest annually. The market price of the bond is
$1,095, and the market's required yield to maturity on a
comparable-risk bond is 6 percent. a. Compute the bond's yield to
maturity. b. Determine the value of the bond to you given the
market's required yield to maturity on a comparable-risk bond.
c. Should you purchase the bond?

The 19-year, $1000 par value bonds of Waco Industries pay 8
percent interest annually. The market price of the bond is $1105,
and the market's required yield to maturity on a comparable-risk
bond is 5 percent.
a.Compute the bond's yield to maturity.
b.Determine the value of the bond to you given the market's
required yield to maturity on a comparable-risk bond.
c.Should you purchase the bond?
a.What is your yield to maturity on the Waco bonds given the
current market...

The 12-year, $1,000 par value bonds of Smith Industries pay 7
percent interest annually. The market price of the bond is $885,
and the market’s required yield to maturity on a comparable-risk
bond is 10 percent.
What is your yield to maturity on the Smith bonds given the
current market price of the bonds? Round to two decimal
places.
What should be the value of the Smith bonds given the market's
required yield to maturity on acomparable-risk bond? Round to...

(Bond valuation relationships)The 14-year,
$1,000 par value bonds of Waco Industries pay 11 percent interest
annually. The market price of the bond is $1,115, and the
market's required yield to maturity on a comparable-risk bond is 8
percent.
a. Compute the
bond's yield to maturity.
b. Determine the
value of the bond to you given the market's required yield to
maturity on a comparable-risk bond.
c. Should you
purchase the bond?
1) What is your yield to maturity on
the...

The 11-year, $1,000 par value bonds of Witt Industries pay 7
percent interest annually. The market price of the bond is $865,
and the market’s required yield to maturity on a comparable-risk
bond is 10 percent. A. What is your yield to maturity on the Witt
bonds given the current market price of the bonds? _% Please round
to two decimal places. B. What should be the value of the Witt
bonds given the market's required yield to maturity on...

Fingen's 12-year, $1,000 par value bonds pay 15 percent
interest annually. The market price of the bonds is $880 and the
market's required yield to maturity on a comparable-risk bond is
16 percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you, given your required
rate of return.
c. Should you purchase the bond?

Fingen's 15-year, $1,000 par value bonds pay 12 percent
interest annually. The market price of the bonds is $1,100 and
the market's required yield to maturity on a comparable-risk bond
is 9 percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you, given your required
rate of return.
c. Should you purchase the bond?

ExxonMobil 12 year bonds pay 9 percent interest annually on a
$1,000 par value. If the bonds sell at $775 what is the bonds'
expected rate of return? The bonds' expected rate of return is
?

Fingen's 15-year, $1,000 par value bonds pay 11
percent interest annually. The market price of the bonds is $920
and the market's required yield to maturity on a comparable-risk
bond is 14 percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you, given your required
rate of return.
c. Should you purchase the bond?

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