# Calculating yield and years till maturity. Fill in the table for the following zero coupon bonds...

Question 1

Problem 4-14 (please see the attached excel file)

"Calculating Yield and years till maturity"

Fill in the table below for the following zero coupon bonds. The face value of each bond is $1,000.

Use the RATE, NPER, and PV function to solve for the unknowns in the table below.

Yield to

Price Maturity Maturity

$300 30 ?

$300 ? 8%

? 10 10%

Question 2

Problem 11-15 (please see the attached excel file)

"Determine the capital structure of a firm"

Examine the following book-value balance sheet for University Products, Inc. What is the capital structure of the firm based on market value? The preferred stock currently sells for $15 per share and the common stock for $ per share. There are one million common shares outstanding.

BOOK VALUE BALANCE SHEET

(all values in millions)

Assets Liabilities and Net Worth

Cash and short-term securities $1 Bonds, coupon = 8% paid annually

Maturity = 10 years, yield to maturity = 9% $10.0

Account receivable 3 Preferred stock (par value $20 per share) 2.0

Common stock (par value $.10) 0.1

Inventories 7 Additional paid in stockholders 10.0

Plants and equipment 21 Retained earnings 10.0

----------- ------------

$32 $32.0

Enter formulas to calculate the capital structure in dollars (Please open the attached excel files)

Capital Structure

Dollars Percent

--------------------------------

Bonds FORMULA

Preferred stock FORMULA

Common stock FORMULA

--------------------------------

Total $

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https://brainmass.com/business/bond-valuation/60990

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