ABC, Inc. currently has an issue of bonds outstanding that will mature in 31 years.

4) ABC, Inc. currently has an issue of bonds outstanding that will mature in 31 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 20.0% with annual coupon payments. The bond is currently selling for $1000. What is your expected quoted annual rate of return if you buy the bonds and hold them until maturity?

5) XYZ, Inc. has a bond issue outstanding with a $1,000 par value and a maturity of 40 years. The bonds have an annual coupon rate of 15.0% with quarterly coupon payments. The current market price for the bonds is $1,035. The bonds may be called in 4 years for 115.0% of par. What is the quoted annual yield-to-maturity for the bonds? What is yield to call?

6) You are considering buying bonds in HGZT, Inc. The bonds have a par value of $1,000 and mature in 13 years. The annual coupon rate is 11% and the coupon payments are annual. The bonds are currently selling for$1,442.63 based on a yield-to-maturity of 6.0%. What is the bond's current yield?

Expert Solution

4)

The bond is selling at par .Hence the annual rate of return is equal to the coupon rate i.e. 20%

5)

6)

jeff jeffy answered 2 years ago

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