Purchase Solution

Bonds from AT&T, Dell, and IBM

Not what you're looking for?

Ask Custom Question

Given the following data on bonds from AT&T, Dell, and IBM. Each bond has a par value of $1000.

(see the attached file)

Calculate the value of the bond if your required return is 5 percent on AT&T, 6.5 percent on Dell, and 8 percent on IBM.
Determine the yield to maturity (YTM) on the bonds given the following prices.

AT&T

Dell

IBM

Price

$1,060.00

$1,016.57

$1,307.78

Based on each bond's ratings and your determination of its yield to maturity explain how you rank each bond for risk and return.
Assume you had $10,000 to invest. How many of each bond would you have? What dollar amount of interest would each bond return on the investment for the next year? What would your percentage return be for the year, that is, your interest payments divided by the total amount invested? Please submit your tutorial in Excel or other supporting documentation showing how the answers were reached.

Purchase this Solution

Solution Summary

The ranking is based on the difference between the value of the bond to me based on my required rate of return and the bond's current market price. This solution is calculated in the attached Excel file.

Purchase this Solution


Free BrainMass Quizzes
Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Learning Lean

This quiz will help you understand the basic concepts of Lean.