In: Finance

Fingen's 13-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $850 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 your required rate of return.

c. Should you purchase the bond?

**Part (a):**

Yield to Maturity (YTM)= **11.250311%** calculated
using the RATE function of Excel as follows:

**Part (b):**

Value of the bond at the required YTM of 10%=
**$ 928.97**
calculated using PV function of Excel as follows:

**Part (c):**

YTM of the bond is 11.25%, higher that the market expectation of 10%

As a result, current price of $850 is lower than the intrinsic value of $928.97.

**Hence we shall purchase the bond.**

(Bond valuation)?Fingen's 14?-year, ?$1,000 par value bonds pay
13 percent interest annually. The market price of the bonds is
?$870 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?
a. What is your yield to maturity on the Fingen bonds given the
market price of the? bonds?...

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?

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?

(Bond valuation) Fingen's 16-year,
$1,000 par value bonds pay 14 percent interest annually. The market
price of the bonds is $870 and the market's required yield to
maturity on a comparable-risk bond is 15
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?
a. What is your yield to
maturity on the Fingen bonds given the market price of the...

Fingen's 11-year, $1, 000 par value bonds pay 12 percent
interest annually. The market price of the bonds is $1,090 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?

7) Part 1. (Bond valuation)Fingen's 19?-year,
?$1,000 par value bonds pay 13 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 10 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?
Part 2. (Yield to? maturity) Abner?
Corporation's bonds mature in 19 years and pay 11...

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?

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
?

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?

ADVERTISEMENT

ADVERTISEMENT

Latest Questions

- 3. A borrower has a 30-year mortgage loan for $200,000 with an interest rate of 5%...
- Write a subroutine that will receive a char input value. This subroutine should then use a...
- A proton in a high-energy accelerator moves with a speed of c/2. Use the work
- Based on the article shared in google classroom the "economy" explain the industrial structure and the...
- A voltaic cell is constructed that is based on the following reaction: Sn2+(aq)+Pb(s)→Sn(s)+Pb2+(aq). Part A If...
- Which format do you prefer, direct or indirect? Why? What advantages & disadvantages are there for...
- US History. Discuss the farm crisis of the late 19th century. What were the issues and...

ADVERTISEMENT