Question
In: Finance
Jerome Corporation’s bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000...
Jerome Corporation’s bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000 par value. The bond has a 6.00% nominal yield to maturity, but it can be called in 6 years at a price of $1,050. What is the bond’s nominal yield to call?
a.5.27%
b.5.54%
c.4.34%
d.6.10%
e.5.81%
Solutions
Expert Solution
Calculate the current price of the bond as follows:
Price $1,269.506069.
------------------------------------------------------------------------------------------------------------------
Calculate the yield to maturity as follows:
Semiannual rate is 2.16926%
Yield to call is 2.16926%*2 4.34%.
Therefore, Option C is correct.
jeff jeffy answered 1 year agoRelated Solutions
Jerome Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000...
Jerome Corporation's bonds have 15 years to maturity, an 8.75%
coupon paid semiannually, and a $1,000 par value. The bond has a
6.50% nominal yield to maturity, but it can be called in 6 years at
a price of $1,050. What is the bond's nominal yield to call?
Jerome Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000...
Jerome Corporation's bonds have 15 years to maturity, an 8.75%
coupon paid semiannually, and a $1,000 par value. The bond has a
6.50% nominal yield to maturity, but it can be called in 6 years at
a price of $1,195. What is the bond's nominal yield to call?
a. 7.15%
b. 7.00%
c. 7.60%
d. 7.45%
e. 7.30%
Jerome Corp. bonds have 15 years to maturity an 8.75% coupon paid semi-annually and a $1,000...
Jerome Corp. bonds have
15 years to maturity
an 8.75% coupon paid semi-annually
and a $1,000 par value.
The bond has a 6.50% yield to maturity, but it can be called in
6 years at a price of $1,050.
What is the bond's market price?
What is the bond's yield to call?
Mercy Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000...
Mercy Corporation's bonds have 15 years to maturity, an 8.75%
coupon paid semiannually, and a $1,000 par value. The bond has a
6.50% nominal yield to maturity, but it can be called in 6 years at
a price of $1,050. What is the bond's nominal yield to call?
Please show all work
Moerdyk Corporation's bonds have a 15-year maturity, a 5.25% coupon rate with interest paid semiannually, and...
Moerdyk Corporation's bonds have a 15-year maturity, a 5.25%
coupon rate with interest paid semiannually, and a par value of
$1,000. The nominal required rate of return on these bonds is
7.25%. What is the bond’s intrinsic value? Enter your answer
rounded to two decimal places. Do not enter $ or comma in the
answer box. For example, if your answer is $12,300.456 then enter
as 12300.46 in the answer box.
Moerdyk Corporation's bonds have a 15-year maturity, a 5.25% coupon rate with interest paid semiannually, and...
Moerdyk Corporation's bonds have a 15-year maturity, a 5.25%
coupon rate with interest paid semiannually, and a par value of
$1,000. The nominal required rate of return on these bonds is
6.50%. What is the bond’s intrinsic value? Enter your answer
rounded to two decimal places. Do not enter $ or comma in the
answer box. For example, if your answer is $12,300.456 then enter
as 12300.46 in the answer box.
A $1,000 bond with a coupon rate of 5.8% paid semiannually has two years to maturity...
A
$1,000
bond with a coupon rate of
5.8%
paid semiannually has
two
years to maturity and a yield to maturity of
9%.
If interest rates rise and the yield to maturity increases
to
9.3%,
what will happen to the price of the bond?
A.
fall by $6.19
B.
fall by $5.16
C.
rise by $5.16
D.
The price of the bond will not change.
A $1,000 bond with a coupon rate of 6.2% paid semiannually has eight years to maturity...
A $1,000 bond with a coupon rate of 6.2% paid semiannually has
eight years to maturity and a yield to maturity (YTM) of 8.30%. If
the YTM increases to 8.70%, what will happen to the price of the
bond? A. The price of the bond will fall by $18.93 B. The price of
the bond will rise by $15.77 C. The price of the bond will fall by
$20.96 D. The price of the bond will not change
Q1. Moerdyk Corporation's bonds have a 15-year maturity, a 5.25% coupon rate with interest paid semiannually,...
Q1. Moerdyk Corporation's bonds have a 15-year maturity, a 5.25%
coupon rate with interest paid semiannually, and a par value of
$1,000. The nominal required rate of return on these bonds is
7.50%. What is the bond’s intrinsic value?
Q2.Niendorf Corporation's 25-year maturity bonds have an 8.75%
coupon rate with interest paid semiannually, and a par value of
$1,000. The bonds are currently selling at a premium price of
$1,150 in the bond market. What is their yield to maturity...
Hamilton, Inc. bonds have a coupon rate of 15 percent. The interest is paid semiannually, and the bonds mature in 14 years.
Hamilton, Inc. bonds have a coupon rate of 15 percent. The interest is paid semiannually, and the bonds mature in 14 years. Their par value is $1,000. If your required rate of return is 14 percent, what is the value of the bond? What is the value if the interest is paid annually?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Senior physicists constantly complain they spend too much time on administration, teaching, getting grants, serving in...
- Context is 1D Ising model. Metropolis algorithm is used for simulate that model. Among all possible...
- Using a product and country of your choice, determine what would be the best method of...
- Below is what I have to do. This is all performed in SQL. I have written...
- Well, it does according to this preprint for certain scales. What would be a simple way...
- It is well known in racing that driving the car on the ideal "slip angle" of...
- Give short answers or Define the following questions [in your own words]: 1. Compare the difference...
ADVERTISEMENT