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A BOND PROMISES / TUTORIALOUTLET DOT COM

1. Suppose a bond promises to pay interest of $25 every six months and repay principal of $1,000 at maturity in 30 years. If the market interest rate is 7%, calculate the bond price.<br>2. Assume a corporate bond selling at $1,205.16 matures in 6 years at a par value of $1,000 and pays a 9% coupon in the form of two semi annual interest payment s per year. Compute the bond’s yield to maturity.<br>

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A BOND PROMISES / TUTORIALOUTLET DOT COM

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  1. A BOND PROMISES / TUTORIALOUTLET DOT COM

  2. A BOND PROMISES / TUTORIALOUTLET DOT COM A bond promises FOR MORE CLASSES VISIT www.tutorialoutlet.com Suppose a bond promises to pay interest of $25 every six months and repay principal of $1,000 at maturity in 30 years. If the market interest rate is 7%, calculate the bond price. Assume a corporate bond selling at $1,205.16 matures in 6 years at a par value of $1,000 and pays a 9% coupon in the form of two semi annual interest payment s per year. Compute the bond’s yield to maturity. Suppose a 7% coupon bond with a term to maturity of 10 years is priced at $1,050. The bond can be called in 3 years at a call price of par plus one year of interest payments. Compute the yield to call of the bond. Suppose a company has common stock that pays a dividend of $0.1 0 per year and has a market price of $20 per share. Also assume that the company’s $1,000 p ar value, 10.5% convertible bond sells at a market quote of 100, and has a conversion ratio of 30:1. Calculate the bond’s conversion value.

  3. A BOND PROMISES / TUTORIALOUTLET DOT COM This presentation uses a free template provided by FPPT.com www.free-power-point-templates.com

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