1. A company has 8 percent coupon bonds on the market with 10 years left to maturity. Coupons are paid semi-annually. If the bond currently sells for $1,075, what is its yield to maturity?
2. A company just issued 10-year bonds at a coupon rate of 8%. Coupons are annually paid. If YTM on these bonds is 9.3%, what is the current bond value?
3. A company has 8 percent coupon bonds on the market with 10 years left to maturity. Coupons are paid annually. If the bond currently sells for $1,075, what is its yield to maturity?
4. Suppose your company needs to raise $28 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you’re evaluating two issue alternatives: an 8 percent annual coupon and a zero coupon bond. Your company’s tax rate is 25 percent. In 20 years, what will your company’s repayment be if you issue the coupon bonds? What if you issue the zeros? (Assume annual compounding on the zero coupon bond.)
5. If your nominal rate of return is 14.38 percent and your real rate of return is 4.97 percent, what is the inflation rate?
6. A company has 8 percent coupon bonds on the market with 10 years left to maturity. Coupons are paid semi-annually. If the bond currently sells for $1,075, what is its yield to maturity?
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1. A company has 8 percent coupon bonds on the market with 10 years left to maturity. Couponsare paid semi-annually. If the bond currently sells for $1,075, what is its yield to maturity? 6.95% 2….
