Webster University sold bonds with a 25-year maturity, paying an annual coupon rate of 10% that...

Webster University sold bonds with a 25-year maturity, paying an annual coupon rate of 10% that come with 20 warrants attached to each bond. These bonds were issued at $1,000 par value. Currently in the market, bonds similar to the ones that Webster University sold are yielding 12%. What would be the valued amount for the warrants that Webster University’s issued? $5.96 $6.46 $6.94 $7.42 $7.84

Expert Solution

jeff jeffy answered 10 months ago

You own a 10-year bond paying an annual coupon rate of 5%. The yield to maturity...

You own a 10-year bond paying an annual coupon rate of 5%. The yield to maturity on the bond is 7%. The face value, as usual, is $1000. What is the value of the bond today?

Q1-Assume a healthcare organization sold bonds that have a 10 year maturity, a 12% coupon rate...

Q1-Assume a healthcare organization sold bonds that have a 10 year maturity, a 12% coupon rate with annual payments, a $1000 par value: a-suppose that 2 years after the bonds were issued, the required interest rate fell to 7%. What would be the bond's value? b-Suppose the 2 years after the bonds were issued, the required interest rate rose to 13%. What would be the bonds value? c-What would be the value of the bonds 3 years after issue in...

For Bonds Years until maturity 25 Coupon rate (assume annual coupon payments) 8.40% Face 1,000...

For Bonds Years until maturity 25 Coupon rate (assume annual coupon payments) 8.40% Face 1,000 Current Price 880 Number of bonds outstanding 18,000 For Preferred Stock Price of Preferred Stock 34.85 Dividend on Preferred 4.18 Number or preferred shares outstanding 25,600 For Common Stock Common price 26.34 Estimated growth rate in dividends 3.00% Estimated dividend in one year 3.00 (Assume annual dividends) Number of common shares outstanding 729,000 Tax rate 35.40% What...

A newly issued 10-year maturity, 6% coupon bond making annual coupon payments is sold to the...

A newly issued 10-year maturity, 6% coupon bond making annual coupon payments is sold to the public at a price of $920. What will be an investor’s taxable income from the bond over the coming year? The bond will not be sold at the end of the year. The bond is treated as an original issue discount bond. (Round your answer to 2 decimal places.) Taxable Income:

A 10-Year maturity bond making annual coupon payments with a coupon rate of 5% and currently...

A 10-Year maturity bond making annual coupon payments with a coupon rate of 5% and currently selling at a yield to maturity of 4% has a convexity of 145.4. Compute the modified duration of the bond. Based on the information above, compute the approximated new price using the Duration & Convexity adjustment if the yield to maturity increases by 75 basis points. What is the percentage error?

Consider two bonds, a 3-year bond paying an annual coupon of 6.50% and a 10-year bond...

Consider two bonds, a 3-year bond paying an annual coupon of 6.50% and a 10-year bond also with an annual coupon of 6.50%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 9%. a. What is the new price of the 3-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the new price of the 10-year bonds? (Do not round intermediate calculations. Round your answer to...

Consider two bonds, a 3-year bond paying an annual coupon of 7.00% and a 10-year bond...

Consider two bonds, a 3-year bond paying an annual coupon of 7.00% and a 10-year bond also with an annual coupon of 7.00%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 12%. a. What is the new price of the 3-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the new price of the 10-year bonds? (Do not round intermediate calculations. Round your answer to...

Consider two bonds, a 3-year bond paying an annual coupon of 5.40% and a 10-year bond...

Consider two bonds, a 3-year bond paying an annual coupon of 5.40% and a 10-year bond also with an annual coupon of 5.40%. Both currently sell at face value of $1,000. Now suppose interest rates rise to 10%. a. What is the new price of the 3-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond price $ b. What is the new price of the 10-year bonds? (Do not round intermediate calculations. Round...

Consider two bonds, a 3-year bond paying an annual coupon of 6.90% and a 10-year bond...

Consider two bonds, a 3-year bond paying an annual coupon of 6.90% and a 10-year bond also with an annual coupon of 6.90%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 12%. a. What is the new price of the 3-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the new price of the 10-year bonds? (Do not round intermediate calculations. Round your answer to...

Consider two bonds, a 3-year bond paying an annual coupon of 6.60% and a 10-year bond...

Consider two bonds, a 3-year bond paying an annual coupon of 6.60% and a 10-year bond also with an annual coupon of 6.60%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 10%. a. What is the new price of the 3-year bonds? b. What is the new price of the 10-year bonds?

Question