Question

Karol Companies issues 3-year bonds to the public and the market currently requires a return of 3.75 percent on these bonds. The 3.75% is known as the:

If Par (Face Value) is $1,000 and the current market price of the bond is quoted at 105, which of the following conditions describes the relationship of the market rate of interest and the bond's Coupon rate? Yield to Maturity > Coupon rate

Yield to Maturity is less than Coupon rate.

Current yield = YTM

Market value < Face value

Current yield > Coupon rate

DurStein Brewing bonds mature in 7.5 years, have a coupon rate of 4.5 percent and you paid par value at issuance. If the market rate of interest changes to 6.5% by the second year of your ownership, then:

The seven percent bonds issued by Jonzon Products pay interest semiannually, mature in six years, and have a $1,000 face value. Currently, the bonds sell for $977.70. What is the yield to maturity?

Jonzon Products offers 5.60 percent coupon bonds with semiannual payments and a yield to maturity of 7.94 percent. The bonds mature in seven years. What is the current market price per bond if the face value is $1,000?

Today, you plan to sell a $1,000 face value Zero Coupon Bond you currently own. The bond matures in 7.5 years. How much will you receive for your bond if the market yield to maturity is currently 5.79 percent? Ignore any accrued interest. Assume semiannual compounding.

West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If the current price of the bonds is $1,075, what is the YTM?

Johnson Pharma 8% coupon bonds with par value of $1,000.00 making semi-annual payments with a YTM of 6.2 percent. The current price of the bond is $1,069.60.

In how many years will the bonds mature?

Thank you

Answer 1

ONLY 1 ALLOWED YET ANSWERED ALL

1.
Karol Companies issues 3-year bonds to the public and the market currently requires a return of 3.75 percent on these bonds. The 3.75% is known as the
yield to maturity

2.
If Par (Face Value) is $1,000 and the current market price of the bond is quoted at 105, which of the following conditions describes the relationship of the market rate of interest and the bond's Coupon rate?
Yield to Maturity is less than Coupon rate.

3.
DurStein Brewing bonds mature in 7.5 years, have a coupon rate of 4.5 percent and you paid par value at issuance. If the market rate of interest changes to 6.5% by the second year of your ownership, then

WHAT IS THE QUESTION??

4.
The seven percent bonds issued by Jonzon Products pay interest semiannually, mature in six years, and have a $1,000 face value. Currently, the bonds sell for $977.70. What is the yield to maturity?

=RATE(6*2,7%*1000/2,-977.70,1000)*2
=7.46792%

5.
Jonzon Products offers 5.60 percent coupon bonds with semiannual payments and a yield to maturity of 7.94 percent. The bonds mature in seven years. What is the current market price per bond if the face value is $1,000?

=PV(7.94%/2,2*7,-5.60%*1000/2,-1000)
=876.17

6.

Today, you plan to sell a $1,000 face value Zero Coupon Bond you currently own. The bond matures in 7.5 years. How much will you receive for your bond if the market yield to maturity is currently 5.79 percent? Ignore any accrued interest. Assume semiannual compounding.

=1000/(1+5.79%/2)^(7.5*2)
=651.76

7.
West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If the current price of the bonds is $1,075, what is the YTM?

=RATE(23*2,5.3%*1000/2,-1075,1000)*2
=4.75997%

8.
Johnson Pharma 8% coupon bonds with par value of $1,000.00 making semi-annual payments with a YTM of 6.2 percent. The current price of the bond is $1,069.60. In how many years will the bonds mature?

=NPER(6.2%/2,1000*8%/2,-1069.60,1000)/2
=4.49