# Bond purchase

Bakersfield Co. 8.5s16 bonds pay interest semiannually, and are quoted in the WSJ ad 88 1/2. If your rate of return is 10%, would you buy these bonds in 2001 and what is the total amt.

Please show the calculations to get the answer.

Question about bonds purchase or not?

Bakersfield Co. 8.5s16 bonds pay interest semiannually, and are quoted in the WSJ ad 88 1/2. If your rate of return is 10%, would you buy these bonds in 2001 and what is the total amt

Stocks and bonds questions?

Butler corp 6s06 bonds pay interest smiannually and will mature Oct 8, 2006. If your required rate of return is 9%. per annum, how much should you pay for a $1,000 bond on April 9, 2001

Coupon bonds and interest question?

X Company 7% coupon bonds pay interest semiannually. When u bought one it had 11 yrs to maturity and the appropriate discount rate was 9%. After 1 yr th discount rate on such bonds in 8% because of the improved financial health of the Company. If u sell the bond today, what would your capital gain be?

Bond paying interest semiannually?

A bod pays interest semiannually and will mature after 6 yr. The required rate of return by the bondholders is 14% per annum, and the face amt of the bond is $1000. If th market price of the bond is $920.60, find its coupon rate.

Stocks that pay dividends?

X Corp stock pays $6 annual dividend and sells at $62 per share. The company expects to show continued growth at the rate of 4% per annum. Find the required rate of return by the stockholders

https://brainmass.com/business/bond-valuation/decisions-about-bond-purchase-258986

#### Solution Preview

I recommend that you use Excel or a financial calculator to solve such problems. In the absence of a financial calculator, I'll show you the formulas in Excel.

We need to calculate the rate of return implied by the current price. We buy the bond if the rate of return is greater than our required rate of return.

In ...

#### Solution Summary

The solution is very easy to understand and concise. It is an excellent response for students who want to understand the concepts and then use the same concepts to solve similar problems in the future. Overall, an excellent response. The solution provides the necessary steps which are easy to follow.