Share
Explore BrainMass

Bond Valuation

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?

Bonds

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 Calculations: market price, yield to maturity, expected return, required ROR

11. Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of \$1,000 and makes semiannual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? 12. Ezzel

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

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 http://finance.yahoo.com/ 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

Bowan's Cows Inc. issues a bond with a face value of \$1000

Bowan's Cows Inc. issues a bond with a face value of \$1000, a coupon rate of 7%, and that will mature in 10 years. The current market yield is 10%. If the bond s pay interest semiannually, what is the value of the bonds?

BONDS AND STOCKS

I need assistance with the attached two part assignment. Thanks in advance for your time and assistance!!! References http://www.moneychimp.com/calculator/bond_yield_calculator.htm

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

Returns on stocks and bonds questions

An issue of common stock is expected to pay a dividend of \$4.0 at the end of the year. Its growth rate is equal to 3%, and the current share price is \$40. What is the required rate of return on the stock? a) between 7% and 10% b) between 10% and 12% c) between 12% and 14% d) between 14% and 17% An issue of com

Beta Coefficients, Cost of Equity, and Expected Rate of Return

Please help me with the following problem pertaining to the value of Beta for Wal-Mart: Using the PC Quote Web Page find the value of beta for your reference company. a. What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfol

Racoon Corp's sales last year were \$400,000, and its year-end total assets were \$300,000.

1. Racoon Corp's sales last year were \$400,000, and its year-end total assets were \$300,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.5. The new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how mu

Calculate: Bond Yields and Pricing

Please answer the following questions about bond yields and pricing. 1. A bond with a face value of \$1,000 has a current yield of 7 percent and a coupon rate of 8 percent. What is the bond's price? 2. A 6-year Circular File bond pays interest of \$80 annually and sells for \$950. What are its coupon rate current yield and yie

Interest Rates, Amount of Discount, Amortization and Interest

See the attached file. 1. In order to purchase a competitor, ABC has decided to issue some bonds payable. The bonds carry the following terms: interest rate of 8%, interest payable semi-annually on January 1 and July 1. The bonds are callable at any time after July 2007 at 104. Due to the market rate of interest on similar

Bonds Payable - calculate issue price and amortize premium

Need assistance with b, c and d. Part (a) is complete. Worksheet is attached. I am confused with premium amortization the calculations and journal entries. Bonds Payable - calculate issue price and amortize premium. On January 1, 2009, Learned, Inc. issued \$60 million face amount of 20-year, 14% stated rate bonds when market

A 20-year bond with a 7.50% semi-annual coupon bond was sold at par 10 years ago.

Please help with the attached file. I. A 20-year bond with a 7.50% semi-annual coupon bond was sold at par 10 years ago. Now the 10-year semi-annual payment corporate bond has a required return (or YTM) of 8.25%. Calculate the bond's market price. The par level of bonds is \$1000. II. a) What is the duration of a 2-year bond

Gephardt, Armey and Gore, a vaudeville booking agency, has issued zero-coupon corporate debt this week

P.416 13. Gephardt, Armey and Gore, a vaudeville booking agency, has issued zero-coupon corporate debt this week, consisting of 80 bonds, each with a face value of \$1,000 and a term to maturity of one year. Industry analyst predict that the value of GAG assets will be \$160,000 in one year if Rupert Murdoch succeeds in purchas

Using Bond Quotes

Suppose the following bond quotes for IOU Corp. appear in the financial page of today's newspaper. Assume the bond has a value of \$1000 and the current date is April 15,2007. What is the yield to maturity of the bond? What is the current yield? What is the yield to maturity on a comparable U.S. Treasury issue?