{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

problem set on bonds - Hakan ERTA 1 Tigers bonds have 10...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Hakan ERTAŞ 1. Tiger’s bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8 percent. The bonds have a yield to maturity of 9 %. What’s the current market price of these bonds? PV= 80.PVAF(10,%9) + 1000.PVIF(10,%9) = -935,83 2. Iron Corporation’s bond will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,050. What is the yield to maturity? What is the YTC? YTM 1100 = 40.PVAF(20, i ) + 1000.PVIF ( 20,i) = 3,31 , YTM = 3,31x2 = 6,62 YTC 1100 = 40.PVAF(10,i) + 1050.PVIF (10,i ) = 3,24 , YTC = 3,24x2 = 6,48 3. Nuns Corporation has issued bonds that have a 9% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? PV = 45.PVIF( 16, 4.25) + 1000.(16, 4.25) = 1028,60 4. A bond that matures in 10 years sells for $985. The bond has a face value of $1,000 and a 7% annual coupon.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ 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