ass06_due100907_sol - ISE 460 Fall 2007 A 1 2 3 4 5 6 7 8 9...

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ISE 460 Fall 2007 Assignment 06 Solution 09/09/2009 Page 1 of 6 Pages No. 1 Extra units 100 Labor cost/hour $30 Unit labor hours 15 Unit material cost $120 Total labor cost $45,000 Over head percentage 50% Overhead $22,500 Total cost $79,500 Profit margin 30% Total price $113,571 Unit Price $1,135.71 No. 2 Face Value $1,000 Coupon rate 12% Periods/Year 2 Remining life 8 years a) Interest rate 9.5% Present value of maturity $475.92 -PV(B19/2,B18*B17,,B15) Present value of the coupons $661.99 -PV(B19/2,B18*B17,B15*B16/B17) Present value of the bond $1,138 C21+C20 Remining life 6 years b) 13.50% Present value of maturity $456.65 -PV(B24/2,B23*B17,,B15) Present value of the coupons $482.98 -PV(B24/2,B23*B17,B15*B16/B17) Present value of the bond $940 No. 3 Rating A Maturity 5/21/2008 coupon 3.250 Current yield based on median price 3.36% Median Price 968.03 Yield to maturity Par $937.07 Coupons $30.96 Total $968.03 6.607% Assume today's interest rate is the latest treasury sale (10/05/07) 4.15% 2 coupons left 2 periods No. 4 Most Active Convertible Bonds You can get the most active convertibles from the WSJ page by the following sequence of links - Markets, Market Data center. Bonds, Corporate Bonds.
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