O’Biren Corporation issues bonds with $8,000,000 face value and 8% coupon rate (paid semi-annually), which mature...

O’Biren Corporation issues bonds with $8,000,000 face value and 8% coupon rate (paid semi-annually), which mature in 5 years. The market initially prices these bonds to yield 6%, compounded semi-annually. Prepare the bond amortization schedule following the format below. Please round up the number to one dollar. Please do this in Excel first and then copy the numbers to the table below.

Period	Bond Beginning Balance	Coupon Amount	Interest Expense	Change in Bond Value	Bond Ending Balance
1
2
3
4
5
6
7
8
9
10

Expert Solution

Calculation is shown below:

Working is shown below:

ekkarill92 answered 1 year ago

a).The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature...

a).The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature in 7 years. Your required rate of return for such an investment is 10% annually. i) How much should you pay for a RM1,000 ARA Corporation bond? ii) If you are given RM90,000, how many units of bond can you purchase? iii) What is the yearly interest income for this bond if I purchase it with RM90,000? iv) You plan to reinvest the coupon...

3. A bond with a face value of $100,000 and coupon interest paid semi-annually at an...

3. A bond with a face value of $100,000 and coupon interest paid semi-annually at an annual rate of 7.50% per annum was issued on 8 May 2013 for 4 years. Similar bonds are now selling at a yield-to-maturity of 7.41% per annum. Based on the most recent and next coupon dates, work out the accrued interest on the settlement date (20-Jan-2015). Please use Actual/Actual as the interest rate basis and leave the Calc_method as its default.

(10 marks) Fortescue Ltd is offering bonds with a coupon rate of 8% p.a., paid semi-annually....

Fortescue Ltd is offering bonds with a coupon rate of 8% p.a., paid semi-annually. The par value of each bond is $1,000 and has eight (8) years to maturity. The yield to maturity is 9%. What is the value of the bond?

A $1,000 face value bond has a coupon of 5% (paid annually) and will mature 20...

A $1,000 face value bond has a coupon of 5% (paid annually) and will mature 20 years from today? A. Assume that the yield-to-maturity is 6%. What is the bond’s: i. Duration ii. Modified Duration B. Assume that the bond’s yield-to-maturity immediately changes from 6% to 6.1% (the bond still has 20 years to maturity). i. Estimate the % change in the bond’s price using modified duration ii. What is actual bond price (at YTM = 6.1%), and the...

A $1,000 face value bond has a coupon of 9% (paid annually) and will mature 16...

A $1,000 face value bond has a coupon of 9% (paid annually) and will mature 16 years from today? A. Assume that the yield-to-maturity is 6%. What is the bond’s: i. Duration ii. Modified Duration B. Assume that the bond’s yield-to-maturity immediately changes from 6% to 5.9% (the bond still has 16 years to maturity). i. Estimate the % change in the bond’s price using modified duration ii. What is actual bond price (at YTM = 5.9%), and the %...

Consider a bond with 10,000 USD par value, 8% coupon rate paid semi annually and 10...

Consider a bond with 10,000 USD par value, 8% coupon rate paid semi annually and 10 years to maturity. Assuming a 10% required return, answer the following questions: Find the PV of the bond Find the PV of the bond given it’s a Zero-Coupon Bond. What is the bond’s price elasticity if the required return changed to 12%? Calculate the duration of the bond. What is the modified duration at an 8% yield? What is the percentage change in bond’s...

Consider a bond with a coupon rate of 8% and coupons paid semi annually the par...

Consider a bond with a coupon rate of 8% and coupons paid semi annually the par value is $1000 and the bond has 10 year to maturity the yield to maturity is 10% what is the value of the bond?

A corporate bond issued by GE Capital has 3% coupon rate (paid semi-annually), a face value...

A corporate bond issued by GE Capital has 3% coupon rate (paid semi-annually), a face value of $1,000, and matures in 3 years. If the bond is priced to yield 2.213% (annualized), what is the bond's current price?

The Kenny Company has 10,000 bonds outstanding. The bonds are selling at 98% of face value, have a 10% coupon rate, pay interest semi-annually, and mature in 9 years.

The Kenny Company has 10,000 bonds outstanding. The bonds are selling at 98% of face value, have a 10% coupon rate, pay interest semi-annually, and mature in 9 years. There are 1.87 million shares of common stock outstanding with a market price of $15 a share and a beta of 0.89. The common stock just paid a dividend of $0.7474 and expects to increase those dividends by 1.35% annually. The flotation cost for equity is 6.5% and the flotation...

The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature in 7 years.

a) The ARA Corporation bonds have a coupon of 14%, pay interest semi-annually, and they will mature in 7 years. Your required rate of return for such an investment is 10% annually.i) How much should you pay for a $1,000 ARA Corporation bond?ii) If you are given RM90,000, how many units of bond can you purchase?iii) What is the yearly interest income for this bond if I purchase it with RM90,000?iv) You plan to reinvest the coupon interest at 12%...

Question