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Bond Valuation

Yield to maturity calculations for bond

Consider this: Zero coupon money multiplier notes of 2008. Bonds were issued on July 1,1990 for $100. Interest is paid every July 1 and the bond matures on July 1, 2008. Determine the yield to maturity if the bonds are purchased at the: a. issue price in 1990 b. Market price as of July 1, 2004, of $750 c. Explain why th

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

Coupon rate, coupon yield, and yield to maturity

A firm issues a bond at par value. Shortly thereafter, interest rates fall. If you calculated the coupon rate, coupon yield, and yield to maturity for this bond after the decline in interest rates, which of the three value would be highest and which would be lowest? Explain

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

Bond Valuation

You are evaluating two different $1,000 maturity corporate bonds to buy. The ABC Company bond has a 7 percent annual coupon with 7 years remaining while the XYZ Company bond has a 10 percent annual coupon with 5 years remaining. You could also buy a newly issued 10-year bond from Widget Company of America that has a 12 percent c

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?

Implied annual yield, Forward rate

A Treasury bond futures contract has a settlement price of 89-8. What is the implied annual yield? Suppose that 1 Swiss franc could be purchased in the foreign exchange market for 60 U.S. cents today. If the franc depreciated 10% tomorrow against the dollar, how many francs would a dollar buy tomorrow?

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

Bond Amortization for Bishop Company

On January 1, 2006, Bishop Company issued 11% bonds dated January 1, 2006, with a face amount of $10 million. The bonds mature in 2015 (10 years). For bonds of similar risk and maturity, the market yield is 13%. Interest is paid semiannually on June 30 and December 31. (1.) Determine the price of the bonds at January 1,

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

Bond Amortization..

ABC issues $20M in bonds on January 1, 2004. The bonds mature in 30 years and pay interest at the end of each semi-annual period on July 1 and January 1. The bonds have a coupon rate of 10% and were issued when the market rate of interest is 12%. Bond issue costs of $300,000 were paid in cash. 1. Calculate the proceeds of

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

Tyler Food Corporation: Approximate Yield to Maturity

Bonds issued by the Tyler Food Corporation have a par value of $1,000, are selling for $1,080, and have 20 years remaining to maturity. The annual interest payment is 12.5 percent ($125). Compute the approximate yield to maturity, using formula 102.

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

Computing Individual or Component Costs of Capital

11-2 (Individual or component costs of capital) Compute the cost of the following: a. A bond 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

Sale Price and Amortization Schedule for Bonds

Assume that on 1-1-07, Janila Co. issued $500,000 of 6%, ten-year bond for a yield of 7%. The bonds pay interest annually on December 31. a. What will be the sale price of the bonds? b. Prepare an amortization schedule under the effective interest method for the first three years of the bond's life.

Calculations for Value of Required Return

A bond issued by Cornwallis, Inc. 15 years ago has a coupon rate of 7% and a face value of $1,000. The bond will mature in 10 years. What is the value (to the nearest dollar) to an investor with a required return of 10%? a. $816 b. $886 c. $772 d. $728

Choosing Bond Options

You can buy a $50 savings bond today for $25 and redeem the bond in 10 years for its full face value of $50. You could also put your money in a money market account that pays 7% interest per year. Which option is better, assuming they are of equal risk? a. The money market account is better because it pays more interest. b.

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

AT&T Corporation has several issues of bonds outstanding.

AT&T Corporation has several issues of bonds outstanding. One of the outstanding bonds has a 5 1/8 percent coupon and matures on 2004. The bonds mature on April 1 in the maturity year. Suppose an investor bought this bond on April 1, 1999, and assume interest is paid annually on April 1. Calculate the yield to maturity assuming

Finding the Yield of Maturity

Southern Bell has issued 4 3/8 percent bonds that mature on August 1, 2011. Assume that interest is paid and compounded annually. Determine the yield to maturity if an investor purchases a $1,000 denomination bond for $853.75 on August 1, 2004.

Present Value/ Value calculation for Allied Signal Corp.

Consider Allied Signal Corporation's 9 7/8 percent bonds that mature on June 1, 2010. Assume that the interest on these bonds is paid and compounded annually. Determine the value of a $1,000 denomination Allied Signal Corporation bond as of June 1, 2004, to an investor who holds the bond until maturity and whose required rate of

Bond Prices and Yields

18. Bond Prices and Yields. a. Several years ago, Castles in the Sand, Inc., issued bonds at face value at a yield to maturity of 7 percent. Now, with 8 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 15 percent. What has happened to the p

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