Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9%...

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9% paid semiannually and 13 years to maturity. The yield to maturity is 3.8%. What is the price of the bond?

Expert Solution

Price of Bond = $2,224 or $2,224.04

The final answer may vary in 1 or two digits due to round off in PV factors.

Working

Bonds issue price is calculated by ADDING the:

Discounted face value of bonds payable at market rate of interest, and

Discounted Interest payments amount (during the lifetime) at market rate of interest.

.

	Annual Rate	Applicable rate	Face Value	$ 2,000
Market Rate	3.80%	1.90%	Term (in years)	13
Coupon Rate	4.90%	2.45%	Total no. of interest payments	26

.

Calculation of Issue price of Bond
	Bond Face Value		Market Interest rate (applicable for period/term)
PV of	$ 2,000	at	1.90%	Interest rate for	26	term payments
PV of $1	0.61302
PV of	$ 2,000	=	$ 2,000	x	0.61302	=	$ 1,226	A

Interest payable per term	at	2.45%	on	$ 2,000
Interest payable per term	$ 49

PVAF of 1$	for	1.90%	Interest rate for	26	term payments
PVAF of 1$	20.36762
PV of Interest payments	=	$ 49	x	20.36762	=		$ 998	B

				Bond Value (A+B)			$ 2,224.04

ekkarill92 answered 1 year ago

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.4...

Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.4 percent paid semiannually and 13 years to maturity. The yield to maturity of the bond is 4.8 percent. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8...

Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8 percent paid semiannually and 14 years to maturity. The yield to maturity of the bond is 6.4 percent. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bond price $

Crossfade Corp. has a bond with a par value of $2,000 that sells for $2,040.74. The...

Crossfade Corp. has a bond with a par value of $2,000 that sells for $2,040.74. The bond has a coupon rate of 6.66 percent and matures in 18 years. If the bond makes semiannual coupon payments, what is the YTM of the bond?

Bond Valuation: Venchi Industries has outstanding a $1,000 par-value bond with an 8% coupon interest rate....

Bond Valuation: Venchi Industries has outstanding a $1,000 par-value bond with an 8% coupon interest rate. The bond has 12 years remaining to its maturity date. If interest is paid annually, find the value of the bond when required return is (1) 7%, (2) 8%, (3) 10%. Indicate for each case in part a whether the bond is selling at a discount, at a premium, or its par value. Using the 10% required return, find the bonds value when interest...

Bond valuation Lahey Industries has outstanding a $1,000 par-value bond with an •8% coupon interest rate....

Bond valuation Lahey Industries has outstanding a $1,000 par-value bond with an •8% coupon interest rate. The bond has 12 years remaining to its maturity date. •a. If interest is paid annually, find the value of the bond when the required return is (1) 7%, (2) 8%, and (3) 10%. •b. Indicate for each case in part a whether the bond is selling at a discount, at a premium, or at its par value. •c. Using the 10% required return,...

Tinker Corp.’s outstanding bond has a coupon rate of 8 percent and a face value of...

Tinker Corp.’s outstanding bond has a coupon rate of 8 percent and a face value of $1000. The bond matures in six years. Investors require a rate of return equal to 12 percent and interest is paid semiannually. What should be the market price of Tinker’s bond?

A. Allied Banks has outstanding a RS 1,000 par-value bond with a 7% coupon interest rate....

A. Allied Banks has outstanding a RS 1,000 par-value bond with a 7% coupon interest rate. The bond has 10 years remaining to its maturity date.a. If interest is paid annually, find the value of the bond when the required return is(1) 7%, (2) 5%, and (3) 10%. b. Indicate for each case in part a whether the bond is selling at a discount, at a premium, or at its par value.

1....Madison Corporation has a $1,000 par value bond outstanding with a coupon rate of 9% interest....

1....Madison Corporation has a $1,000 par value bond outstanding with a coupon rate of 9% interest. Interest payments are made semiannually. The bond matures in 20 years. If the yield to maturity for similar bonds is 9%, what is the value of the bond? Select one: A. $1,644 B. $1,000 C. $935 D. $908 2....What is the yield to maturity for $1,000 par value bond that pays a coupon rate of interest of 11%, has seven years to maturity, and...

10)Consider a coupon bond that has a par value of $800 and a coupon rate of...

10)Consider a coupon bond that has a par value of $800 and a coupon rate of 12%. The bond is currently selling for $864.64 and has 2 years to maturity. What is the bond's yield to maturity (YTM)? The yield to maturity is _____%. (Round your response to one decimal place.) 11.)What is the yield to maturity (YTM) on a simple loan for $1,500 that requires a repayment of $3,000 in five years' time? The yield to maturity is ___%...

Halliburton Co. currently has a bond outstanding with a coupon rate of 8.513%. Par is an...

Halliburton Co. currently has a bond outstanding with a coupon rate of 8.513%. Par is an integral multiple of $1,000. Coupon payments are twice a year. What is the semi-annual coupon payment on a bond with $1,000 par?

Question