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keownchap07 - CHAPTER 7 PROBLEMS VALUATION AND...

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Page  CHAPTER 7 PROBLEMS VALUATION AND CHARACTERISTICS OF BONDS PROBLEM 7-1 BOND VALUATION DATA Years 20 Face value $1,000.00 Interest 7% Payment $70.00 ROR 10% Market price $875 A) Expected rate of return B) Present value = PROBLEM 7-2 BOND VALUATION DATA Years 14 Face value 1,000 Interest 7% 70 ROR 10% Present Value = 515.67 263.33 PROBLEM 7-3 DATA Years 10 Face value 1000 Interest 6% 60 ROR 8% Today's value $1,060 A) Present value =
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Page  B) Year 1 ROR in one yr = PROBLEM 7-4 BOND VALUATION DATA Coupon rate 10% 100 Times interest paid semi-annual Years to Maturity 8 Par Value 1,000 Required rate of return 8% A) Present value = 582.61 533.91 B) If the interest is annuall = 574.66 540.27 PROBLEM 7-5 DATA Series A Series B Interest $85 85 Years 12 1.00 Future value 1000 1000 A) Series A Series B ROR 5% 5% Present value ROR 8% 8% Present value ROR 12% 12% Present value PROBLEM 7-6 BONDHOLDER'S EXPECTED RATE OF RETURN
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Page  DATA Market Price 900 Interest Paid Semiannual 8% 40 Years to Maturity
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This note was uploaded on 04/16/2008 for the course FIN 100 taught by Professor N/a during the Spring '08 term at Baylor.

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keownchap07 - CHAPTER 7 PROBLEMS VALUATION AND...

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