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# Bond Valuation

### Calculating Bonds and Yield to Maturity

What are bonds? How is the value of a bond calculated? What is the yield to maturity (YTM), and how is it used in bond valuation? Compare the Eurobond to US government bonds. Discuss how they are similar and how they differ. Include a spreadsheet showing your calculations.

### Price of bond: I whish to purchase a 20-year bond that has a maturity value of \$1,000 and makes semiannual interest payments of \$40. What is the maximum price I should be willing to pay for the bond?

I whish to purchase a 20-year bond that has a maturity value of \$1,000 and makes semiannual interest payments of \$40. I require a 10 percent nominal yield to maturity on this investment, what is the maximum price I should be willing to pay for the bond?

### Bond valuation, Yield to maturity

Hilo Inc. of Des Moines Iowa has floated some zero coupon bonds to finance it's capital expenditures. The Par Value of each bond is \$1000. a, Assuming a market price of \$300 with a maturity of 30 years, determine and discuss the bonds yield to maturity. b. Assuming a market price of \$300 and a yield to maturity of 8%, det

### Zota Inc: A Bond's Yield to Maturity

Zota Inc. has a bond issue outstanding with 8 years remaining to maturity, a coupon rate of 10% with interest paid annually, and a par value of \$1000. If the current market price of the bond is \$814.45, what is the bond's yield to maturity?

### Asset Valuation and Corporate Bonds of Ciza Inc.

Ciza Inc. raised \$100 million by floating corporate bonds. Each bond paid a coupon of 7% with a par value of \$1000 and will mature in 4 years. a. Determine the current market value of the bond if the required rate of return is 14%. b. Holding everything constant and assuming that the coupon is paid on a semiannual basis,

### 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

### A general motors bond (face value of \$1000) carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 9 percent

A general motors bond (face value of \$1000) carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 9 percent a. what interest payments do bondholders receive each year? b. At what price does the bond sell? (assume annual interest payments.) c what will happen to the bond pric

### Calculate interest payments and price of a bond.

A general motors bond (face value of \$1000) carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yeild to maturity of 9 percent a. what interest payments do bondholders receive each year? b. At what price does the bond sell? (assume annual interest payments.) c what will happen to the bond pric

### Wine and Roses, Inc: The Market Price

Wine and Roses, Inc. offers a 7 percent coupon bond with semiannual payments and a yield to maturity of 7.73 percent. The bonds mature in 9 years. What is the market price of a \$1,000 face value bond?

### Yield to Maturity Given Face Value, and Current Market Price

A General Co. bond has an 8 percent coupon and pays interest annually. The face value is \$1,000 and the current market price is \$1,020.50. The bond matures in 20 years. What is the yield to maturity? (Answer format x.xx).

### High Noon Sun, Inc: Bond Maturity

High Noon Sun, Inc. has a 5 percent, semiannual coupon bond with a current market price of \$988.52. The bond has a par value of \$1,000 and a yield to maturity of 5.29 percent. How many years is it until this bond matures?

### 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?

### Giles Co.: Coupon Rate on Bonds

Giles Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 7% coupon bonds on the market that sell for \$1,062, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

### Valuing a Bond, A company issues a bond with semiannual interest payments of \$45 for 10 years and a lump-sum repayment of the \$1,000 face value of the bond after 10 years.

Valuing a Bond, A company issues a bond with semiannual interest payments of \$45 for 10 years and a lump-sum repayment of the \$1,000 face value of the bond after 10 years. If the bond market requires 10% interest compounded semiannually for the debt issued by the company, what is the market price (present value) of the bond?

### Inflation, rate of return

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

### What is the equation that can be used to find the value of a bond with N years to maturity that pays interest once a year? Assume that the bond was issued several years ago.

Is it true that the following question can be used to find the value of a bond with N years to maturity that pays interest once a year? Assume that the bond was issued several years ago.

### Bond Valuation with a Non-Flat Term Structure

Suppose you observe the following prices for zero-coupon bonds (pure discount bonds) that have no risk of default: Maturity Price per \$1 of Face Value Yield to Maturity 1 year 0.97 3.093% 2 years

### 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

### A bond with a face value of \$1000 has a current yield of 7% and a coupon rate of 8%. What is the bond's price?

9. A bond with a face value of \$1000 has a current yield of 7% and a coupon rate of 8%. What is the bond's price? 10. A Corporate bond carries a coupon rate of 8%, has 9 years to maturity, and sells at a yield to maturity of 7%. A) What interest payments do bondholders receive each year? B) At what price does the bond s

### 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

### Inverse relationship between bond ratings and the required return on a bond.

There is an inverse relationship between bond ratings and the required return on a bond. The required return is lowest for AAA rated bonds, and required returns increase as the ratings get lower. (worse) a. true b. false

### Callaghan Motor's Bonds: Maturity and Interest

1. Callaghan Motor's 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. A bond has a 1,000 par value, 10 years to maturity, a 7 percent annual coupon, and

### 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?

### Chardin Corporation issued bond entries

On September 1 2007, Chardin Corporation issued \$300,000, 8%, 10 year bonds at face value. Interest is payable annually on Sept. 1. Chardin year end is December 31. Prepare journal entries to record the following events. a) The issuance of the bonds b) The accrual of interest on December 31, 2007 c) The payment of interest

### A 10-year bond has a 10 percent annual coupon and a yield to maturity of 12 percent - BA II Financial Calculator

Show step by step how to achieve the answer to each problem with a BA II calculator. -The correct answers are already provided: See below: 42. Bond concepts . A 10-year bond has a 10 percent annual coupon and a yield to maturity of 12 percent. The bond can be called in 5 years at a call price of \$1,050 and the bond's

### Consider a \$1,000 par value, 7% annual coupon bond.

Consider a \$1,000 par value, 7% annual coupon bond. The bond matures in 9 years. Assuming the bond's required return is 10%, what is its current yield?

### 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