Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000.

Company (Ticker)	Coupon	Maturity	Last Price	Last Yield	EST $ Vol (000’s)
Xenon, Inc. (XIC)	6.200	Jan 15, 2030	94.279	??	57,370
Kenny Corp. (KCC)	7.200	Jan 15, 2027	??	6.18	48,949
Williams Co. (WICO)	??	Jan 15, 2034	94.815	7.00	43,810

What is the yield to maturity for the bond issued by Xenon, Inc.? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Yield to maturity _________%

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000.

Company (Ticker)	Coupon	Maturity	Last Price	Last Yield	EST $ Vol (000’s)
Xenon, Inc. (XIC)	6.500	Jan 15, 2031	94.293	??	57,373
Kenny Corp. (KCC)	7.230	Jan 15, 2030	??	5.36	48,952
Williams Co. (WICO)	??	Jan 15, 2037	94.845	7.06	43,813

What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Price _______ $

What is the bond’s current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Current yield ________%

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000.

Company (Ticker)	Coupon	Maturity	Last Price	Last Yield	EST $ Vol (000’s)
Xenon, Inc. (XIC)	6.900	Jan 15, 2035	94.333	??	57,377
Kenny Corp. (KCC)	7.270	Jan 15, 2032	??	6.32	48,956
Williams Co. (WICO)	??	Jan 15, 2038	96.885	6.57	43,817

What is the coupon rate for the Williams Co. bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Coupon rate _______%

Answer 1

a.

For Xenon Bond,

Par value = $2,000

Last price = $2,000 × 94.279%

= $1,885.58.

last price of Xenon Bond is $1,885.58.

Number of year remains in maturity = 14 year (Year 2030 - $2016)

YTM of Xenon bond is caluclated in excel and screen shot providedbelow:

YTM of Xenon bond is 6.84%.

b.

Price of Kenny Corp. bond is calculated in excel and screen shot provided below:

Price of Kenny Corp. bond is $2,365.02.

Now,

Current Yield = Annual Coupon Payment / Current price

= ($72.30 × 2) / $2,365.02

= 6.11%

Current Yield of Kenny Corp. bond is 6.11%.

c.

For, Williams Co. bond

Number of year in maturity = 20 year

Current price = $2,000 × 96.885%

= $1,937.70.

Current price of Williams Co. bond is $1,937.70.

Coupon rate of Williams Co. bond is calculated in excel and screen shot provided below:

Coupon rate of Williams Co. bond is 6.29%.