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Bond Valuation

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

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?

CPI, annual compound inflation rate, dollar cost of investment , nominal interest rate, real interest rate, realized real interest rate, current price of the bond, realized annual rate of return, compounded annual rate of return on investment,

1. If the CPI today is equal to 135 and five years ago it was 105, then the annual compound inflation rate is approximately 2. A deposit of $1,000 invested at 3.75%, compounded annually, will be worth approximately how much at the end of 5 years? 3. Assume that a proposed investment will generate revenue of $3,000 at t

Valuation of known cash flows

Assume that all of the bonds listed in the following table are the same except for their pattern of promised cash flows over time. Prices are quoted per $1 of face value. Use the information in the table and the Law of One Price to infer the values of the missing entries. Assume that the coupon payments are annual. coupon

Payback Method, Compute Cash Flow, Compute Price of Bonds

I would like to have these problems worked out in Word format please. Problem 1) You are called in as a financial analyst to appraise the bonds of the Holtz Corporation. The $1,000 par value bonds have a quoted annual interest rate of 14 percent, which is paid semiannually. The yield to maturity on the bonds is 12 percent an

Bond Valuation: Interest and Semiannual Compounding

Please use Excel and show a cash flow time line to solve the following: I'm purchasing a 10-year bond with a $1,000 face value that pays interest of $60 semiannually. The yield to maturity is 10 percent with semiannual compounding. What price should I pay for the bond?

Investment questions: nominal annual return, effective annual rate, bond's market price, one-year interest rate expected one year from now, duration of a five-year bond, decrease in the market rates of interest, discount quote, commercial paper, T-Bill, annuity, mortgage, foreign exchange rate, ARM, fixed rate mortgages

Assume all bonds have a face value of $1,000.00, unless otherwise informed 1. You buy an investment today for $9,825. You sell the investment in 90 days for $10,000. a. What is the nominal annual return on this investment? b. What is the effective annual rate on this investment? 2. A 10 year semi-annual payment c

Balance Sheet & Bonds

How does an increase in the firm's balance sheet debt affect the credit quality/rating and valuation of its bonds?

What is the discount yield, bond yield, and effective annual return on a $1million Treasury bill? Calculate the T-bill's quoted discount yield. Calculate the T-bill's bond equivalent yield. Calculate the discount yield and bond equivalent yield on the commercial paper. Calculate the conversion value of each bond. Calculate your monthly payments on this mortgage. What is mortgage sale?

1. What is the discount yield, bond yield, and effective annual return on a $1million Treasury bill that currently sells at 97 3/8 percent of its face value and is 65 days sells at maturity? 2. Suppose you purchase a T-bill that is 125 days from maturity for $9,765. The T-bill has a face value of $10,000. a. Calculate the T

NPV, Bond Price & Stock Price

3. NPV: You have an opportunity to invest in a business that will pay $200,000 in one year, $400,000 in two years, $600,000 in three years and $800,000 in four years. You can earn 12% per year compounded annually on a mutual fund that has similar risk. If it costs $1.2 million to start this business, what is the NPV & should yo

Bonds stocks and reserve requirements

1. Johnson Motors' bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $1000 par value, and the coupon rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds? 2. A 10-year, 12% semiannual coupon bond with a par value of $1000 sells for $1100.

Bond Value

What is the percentage of face value for a $1000 bond that is a 6% semi-annual coupon bond with 10 years remaining before maturity and a zero coupon bond with 10 years remaining until maturity if the market yield is 8%. Please show me the steps to solve this. Thank you.

Portoflio and Risk

Suppose you owned a portfolio consisting of $250,000 worth of long-term U.S. government bonds. a. Would your portfolio be riskless? b. Now suppose you hold a portfolio consisting of $250,000 worth of 30-day Treasury bills. Every 30 days your bills mature, and you reinvest the principal ($250,000) in a new bach of bills. As

Bond Return

What is the % market yield on a $1,000 bond that currently sells for $627.76 that is an 8% coupon rate bond that has 15 years remaining before maturity? Is it 7, 8, 14, or 16% and how do you solve this? Please show me the steps. Thank you.

Question about Yield Curve

Need help with this problem (practice exercise): Suppose you and most other investors expect the inflation rate to be 7% next year, to fall to 5% during the following year, and then to remain at a rate of 3% thereafter. Assume that the real risk-free rate, r*, will remain at 2% and that maturity risk premiums on Treasury secu

Current Yield and Yield to Maturity of a bond

You hold a 10-year-maturity coupon bond that was issued 9 years ago with a coupon rate of 10%. If the interest rate on 1-year bonds is now at 5%, calculate the current yield and yield to maturity for your 10-year-maturity bond, and compare these with the coupon rate. If the interest rate on the 1-year bonds is now at 12%, calc

Multiple Choice question on investments: financial intermediary, margin, commercial banks, long position, limit order, reserves of commercial banks, specialists, term structure of interest rates, short sell, upward sloping yield curve, pension plans, Money market mutual funds, organized security markets, minimum margin requirement, federally insured investment

1. A financial intermediary transfers A. savings to households. B. savings to borrowers. C. stocks to brokers. D. new stock issues to buyers. 2. If an individual buys stock on margin and its price rises, the investor A. must put up additional collateral. B. must pay tax on the unrealized gain. C. must pay i

Bond Yield to Maturity and Price

Jones Gas Company has $1,000 par value bonds outstanding at 10 percent interest. The market price of the bond was $534.45. Your broker explained that this was due to the low par to value yield calculation of 22.3%. The bonds will mature in 25 years. Compute the current price of the bonds if the present yield to maturity is 7

Yield Maturity

You are considering purchasing some bonds to diversify your investment portfolio. You have $100,000 to invest. You notice that your local city is issuing some bonds to fund the local elementary school building. They are offering $1000 par value bonds for a rate of 6%. These bonds will mature in 20 years. They are selling cu

What is the bonds price today?

One year ago a $1000 face value 6% coupon bond was selling for $918.93. Since then, the market return decreased by two percentage points. The bond pays interest semiannually and now has four years to maturity. The bond's price today is?

Inquiry about Bonds and Stocks

Compute the cost of the following: A. A bond is selling to yield 7 percent after flotation costs, but before adjusting for the marginal corporate tax rate of 34 percent. In other words, 7 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows (principle and interest).