MGT330 - Assignment 2.docx - MGT330 ASSIGNMENT 2 Question 1...

This preview shows page 1 - 2 out of 6 pages.

MGT330: ASSIGNMENT 2 Question 1 a) The RPM ticker symbol for this bond is “ 239753BC9= ”. b) Total funds raised by Target were $200million in USD. c) No, the bond is not convertible, callable, or putable . I determined this using FactSet, Security Overview under Redemption Options . d) According to FactSet, Standard & Poor rated the bond at A . e) The bond pays interest semi-annually , and they paid it last in July 01, 2018 . f) According to FactSet, Interest % annually is 9.875%, so they pay out (FV* [Interest%/2] = $1000 * [0.09875/2]) USD 49.375 semi-annually per 1 bond. g) According to RPM, the bond is for 109.8455% of par and the maturity price on FactSet is set at 100% of par. As the Selling Price is more than the Maturity Price (SP>MP) , the Bond is trading at a premium . h) Accrued Interest = [(Face Value * Coupon Rate)/2] * [Number of days/182] = [(1000*9.875%)/2] * [148/182] = $40.15 per bond ( $401.5 for 10 bonds) Flat Price (as per RPM) = $1,098.455 per bond (i.e. 109.845% of par) ( $10,984.55 for 10 bonds) Dirty Price = Flat Price + Accrued Interest = $( 1,098.455 + 40.15) = $1,138.605 per bond (i.e. 113.86% of par) ( $11,386.05 for 10 bonds) i) using YIELD formula in EXCEL . j) Rate of Return = (P 1 – P 0 ) / P 0 = [ 1,098.044 – 1,098.455] / 1,098.455 = - 0.0374% Question 2 a) Name of ETF on RPM is ISH SP TSX ETF , and
Image of page 1

Subscribe to view the full document.

Image of page 2
You've reached the end of this preview.
  • Summer '14
  • FengChen
  • RPM

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern