Question
In: Finance
Bond A: 10-year annual bond, price $1010, coupon rate 6% par $1000 bond B: 10-year semi-annual...
Bond A: 10-year annual bond, price $1010, coupon rate 6% par $1000 bond B: 10-year semi-annual bond, price $1010, coupon rate 6%, par $1000 Does bond A has a higher cost of debt than bond B?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A bond with a par value of $1,000 has a 6% coupon rate with semi-annual coupon...
A bond with a par value of $1,000 has a 6% coupon rate with
semi-annual coupon payments made on July 1 and January 1. If the
bond changes hands on November 1, which of the following is true
with respect to accrued interest?
The buyer will pay the seller $20 of accrued interest
The seller will pay the buyer $20 of accrued interest
The buyer will pay the seller $10 of accrued interest
The seller will pay the buyer $10...
what is the price of a $1000 par value bond with a coupon rate of 6.9%(annual...
what is the price of a $1000 par value bond with a coupon rate of
6.9%(annual payments) that matures in 25 years, assuming that the
bond's YTM is 4.57% p.a.?
An investor buys 6% semi-annual coupon paying bond with six years to maturity and $1000 par...
An investor buys 6% semi-annual coupon paying bond with six
years to maturity and $1000 par value at $906.15.The bond has a YTM
of 8%. For all the calculations ,keep four digits after the decimal
place
b)Calculate the bond's modified duration
c)If the interest rate increases by 20 basis points, what is the
approximate value of the bond by using modified duration?
d)What is the real value of the bond after the change (using the
bond pricing formula )?
2. Consider a bond selling at par ($1000) with a coupon rate of 6% and 10...
2. Consider a bond selling at par
($1000) with a coupon rate of 6% and 10 years to maturity.
(Assuming
semi-annual
coupon payments)
(a)
What is the price of this bond if the required yield is 8%?
(b)
What is the price of this bond if the required yield increases from
8% to 9%, and by what percentage
did the price of this bond change?
Twitchy – a kind of junk bond –
carries a 10%...
Complete the following table (use $1000 Par value, 10 years, & semi-annual coupon payments): Bond Coupon...
Complete the
following table (use $1000 Par value, 10 years, & semi-annual
coupon payments):
Bond
Coupon Rate
Yield to Maturity
Coupon Payment
Bond Value
Discount or Premium
A
5.0%
4.5%
B
6.0%
9.0%
C
4.0%
8.0%
D
9.0%
8.0%
E
12.0%
15.0%
Suppose that you buy a semi-annual coupon bond with coupon rate of 10%; the market price...
Suppose that you buy a semi-annual coupon bond with coupon rate
of 10%; the market price of $1,120, and the time to maturity of 17
years. Seven years from now, the YTM on your bond is expected to
decline by 2%, and you plan to sell. What is the holding period
yield (HPY) on your investment?
Please give the explanation or formula! Thanks!
Suppose that you buy a semi-annual coupon bond with coupon rate of 10%; the market price...
Suppose that you buy a semi-annual coupon bond with coupon rate
of 10%; the market price of $1,120, and the time to maturity of 17
years. Seven years from now, the YTM on your bond is expected to
decline by 2%, and you plan to sell. What is the holding period
yield (HPY) on your investment
ABC Corp. just issued some new preferred stock. The issue will
pay a $3 quarterly dividend in perpetuity, beginning 12 years from
now. If...
1. How much would the price of a 10 year semi-annual 13% coupon rate bond be,...
1. How much would the price of a 10 year semi-annual 13% coupon
rate bond be, if the market interest rate is 18%? How much would it
be if the interest rate drops to 10%? At which interest rate level
this bond will be sold for its par value?
Calculate the price of the following semi-annual bond: The bond pays a 10% coupon rate, has...
Calculate the price of the following semi-annual bond: The bond
pays a 10% coupon rate, has an annual yield to maturity of 7%,
matures in 20 years and has a face value of $1,000.
Information: Bond contract rate= 7% semi-annual bond par= $10,000 bond market rate = 6% semi-annual Bond...
Information:
Bond contract rate= 7% semi-annual
bond par= $10,000
bond market rate = 6% semi-annual
Bond Life = 10 years
1.) what is the selling price of this bond?
2.) Will it be sold at a discount or premium?
3.) Do the journal entry for the issuance.
4.) Calculate the discount/premium amortization per period
(line method)
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