4. Bond Pricing. A 6-year Circular File bond pays interest of $80 annually and sells for $950. What are its coupon rate, current yield, and yield to maturity? 5. Bond Pricing. If Circular File (see question 4) wants to issue a new 6-year bond at face value, what coupon rate must the bond offer? 6. Bond Yields. A bond has 1
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,
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?
How would a bond be assessed on whether is is "high yielding" or "low yielding" ? How are premiums or discounted bonds tied to the current coupon rate of the bond ?
Jiminy's Cricket Farm issued a 30-year, 9 percent semiannual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company's tax rate is 35 percent. a. What is the pretax cost of debt? b. What is the aftertax cost of debt? c. Which is more relevant, the pretax or the aftertax? Why?
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 http://www.moneychimp.com/calculator/bond_yield_calculator.htm
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
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
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.
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
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
What is the difference between stocks and bonds? Which represents more risk to the company? Why?
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.
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
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.
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
Media Bias, Inc. issued bonds 10 years ago at $1,000 per bond. These bonds had a 35-year life when issued and the annual interest payment was then 10 percent. This return was in line with the required returns by bondholders at that point in time as described below: Real rate of return 2% Inflation premium 4 Risk premium
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
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.
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
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
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
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
On January 1, a company issues bonds with a par value of $300,000. The bonds mature in 5 years and pay 8% annual interest each June 30 and December 31. On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables: Presen
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
38. Beach Combers International has 5.75% coupon bonds outstanding with a current market price of $689.40. The yield to maturity is 11.20% and the face value is $1,000. Interest is paid semiannually. How many years is it until these bonds mature?
Beach Combers International has 5.75% coupon bonds outstanding with a current market price of $689.40. The yield to maturity is 11.20% and the face value is $1,000. Interest is paid semiannually. How many years is it until these bonds mature?
27. Culpepper Supply has a bond issue outstanding that pays a 7.5 % coupon and matures in 14 years. The bond have a par value $1,000 and market price of $942.90. Interest is paid semiannually. What is the yield to maturity?
The bonds issued by Jordache Jewellers bear a 7.5% coupon, payable semiannually. The bonds mature is 13 years and have a $1,000 face value. Currently, the bonds sell at par. What is the yield to maturity?