Explore BrainMass

Bond Valuation

4 problems: Stocks & Bonds for ABC Co, XYZ Co and Large Co

Problem 1 On January 1, 2002, the ABC Corpoartion purchased a six-year, 12% bond having a maturity value of $300,000. The bond was purchased at a market price of $288,000 and provides an effective interest rate of 13%. The bonds are dated January 1, 2002 and mature on January 1, 2008.

Bond Interest Payments, Price of a Bond and Yield to Maturity Question

Please help with the following problem. Provide step by step calculations. Assume it is early 2003 and the following bond quotations appeared in the Wall Street Journal: ConocoPhillips (COP) 5.900 Oct 15, 2032 95.972 6.200 90 30 88,510 Amerada Hess (AHC) 7.125 Mar 15, 2033 100.145 7.113 179 30 55,000 a. How much in an

Financial Securities valuation - Bonds

Hi, I have questions for 2 problems , can somebody please help ? thanks Problem 1. Your uncle is interested in buying a certain stock, which he says is undervalued and should be worth $35 per share. He has asked for your help. The stock's dividend, currently at $1.10, is expected to increase at a rate of 5% per year forev

Stocks and Bonds: Risk premium, Bond Valuation, expected return

Need assistance with the following questions please in excel with detailed explanations. 1. Suppose the market can be described by the following three sources of systematic risk with associated risk premiums. Factor Risk Premium Industrial production (I) 7% Interest rates ( R) 3 Consumer confidence ( C) 5 T

Bonds: Determining the Value

Please help with the following problem: You purchased a $1,000 five percent coupon bond that matures in 10 years. How much would your bond be worth if interest rates fall to 4% the day after you purchase the bond? What would the bond be worth in one year if interest rates fell to 4% at that point?


You are considering purchasing a bond at the end of this year. The bond has a coupon rate of 10.5 percent, interest payments are made annually and the bond matures in 20 years. If your required pretax rate of return is 14 percent, what is the maximum price you would be willing to pay for a 20-year, 10.5 percent bond? Assume t

Bond Valuation comparison of a 1 year and a 15 year bond.

An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 15 years, while Bond S matures in 1 year. A. What will the value of each bond be if the going interest rate is 5%, 8%, and 12%. Assume that there is only one more interest payment to be made on Bon

Heymann Company's Bonds: Yield to Maturity

6-7 The Heymann Company's bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a $1000 par value; and the coupon interest rate is 9%. a) What is the yield to maturity at a current market price of (1) $829 or (2) $1104? b) Would you pay $829 for one of these bonds if you thought that the appropri

Bonds: current yield, yield to call, price

1. A newly-issued corporate bond has 20 years to maturity. The bond has a coupon rate of 8 percent and pays interest semiannually. Also, the bond is callable in 6 years at a call price equal to 115 percent of par value. The par value of the bonds is $1,000. The yield to maturity is 7 percent. a. What is the bon

Theoretical market value using semiannual analysis: Pacific Western Corporation

Pacific Western Corporation pays an 11 percent coupon rate on debentures that are due in 20 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,060. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. Fin

Bond valuation question

McDonalds Corporation has 8 percent coupon bonds on the market with 9 years left to maturity. The bonds make annual payment. If the bond currently sells for $910.85, what is the yield to maturity? Is the bond selling at a discount or premium?

Price of a Bond: Bond Valuation for Complex Systems

Complex Systems has an outstanding issue of $1,000-par value bonds with a 12% coupon interest rate. The issue pays interest annually and has 16 years reamining to its maturity date. a. If bond of similar risk are currently earning a 10% rate of return, how much should the Complex Systems bond sell for today? b. Describe th

FINANCE calculations: NPV, ROE, MRP, CAPM, WACC, IRR, Beta and others

Please see attach document. 1. The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to _________. (Points: 10) maximize its expected total corporate income maximize its expected EPS minimize the chances of losses maximize the stock price per

Bonds and Stocks in a Market

Bond No. Maturity Coupon Price Yield to Maturity 1 2 years $50 $992 ? 2 3 years $45 ? 5.52% 3 4 years $60 $1,015 ? 4 6 years $54 ? 5.82% (a) Compute the yi

Calculating returns for stock and bonds - Set of 14 problems:

Please show all work and complete in excel. Problem Set #1 Calculating Returns: 1. a) Assume you bought 1000 shares of stock at an initial price of $25 per share. The stock paid a dividend of $0.50 per share during the following year, and the share price at the end of the year when you sold it, was $35. Compute y

Valuation of a Stock and Bond

With that in mind, you decide to put an Excel spreadsheet together that values the firm's stock and bonds. The company's stock trades for US$35 per share, with an annual dividend payment of US$1.50, expected to grow to US$1.58 next year. The required return on stocks is 10%, and the dividend is expected to increase by 6% for the

Stocks and Bonds

How do stocks and bonds differ? What are the key differences between them with respect to ownership rights, claims on income and assets, maturity, risks, and tax treatment? Why might an organization choose one versus the other as a long-term financing instrument?

Bond Valuation Questions

1. Bond valuation Callaghan Motors' bonds have 10 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 8 percent; and the yield to maturity is 9 percent. What is the bond's current market price? 2. Current yield and yield to maturity A bond has a $1,000 par value,

Risk and Return and Stock Valuation

Please assist me with this problem: Go to Yahoo! Finance at and look up the stock information for a publicly traded company of your using. If you already know your publicly traded company's stock symbol, all you have to do is enter the letters in the "Get Quotes" field near the top of the page and th

Price of bond

Bonds mature in 10 yrs, par value of 1,000, annual coupon payment of $80, interest rate for bonds is 9%. What is price of bonds?

Bonds And Shares Valuation

Please find the attached file for the problem. Many thanks in advance ? Anna Hegg has been considering investing in the bonds of Atilier Industries. The bonds were issued 5 years ago at their $1000 par value and have exactly 25 years remaining until they mature. They have an 8% coupon interest rate, are convertible into 50 s

Yen-denominated bonds

One recommended approach to strengthen the dollar against the yen is for the U.S. Treasury to issue about $70 billion a year (the Japanese share of the U.S. trade deficit) in yen-denominated bonds. How might this move help the dollar?


I need assistance with the attached two part assignment. Thanks in advance for your time and assistance!!! References

Questions on returns on stock and bond investments

1) A stock that does not pay a dividend of which you buy 100 shares for $23.00 per share and sell the 100 shares for $25.00 a year later. You pay the $50.00 commission when you sell the securities. 2) A 5-year bond you purchase for US$1,000 that pays a 7% coupon rate semiannually. You hold the bond until maturity. 3) The