Chapter 6b

Chapter 6b - Chapter 6b 1. Calculate the value of a bond...

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

View Full Document Right Arrow Icon
Chapter 6b 1. Calculate the value of a bond that matures in 30 years and has a face value of $1000. The coupon rate is 7% and the investor’s required rate of return is 11%. 2. Inkie McInkerton Inc. is about to issue a 25 year bond with the following terms: $1000 face value, an 8% coupon payment, and a required market return of 5.5%. What is should be the price of this bond? 3. You are considering buying a bond with the following terms: $1000 face value, a 5% coupon rate, a price of $972. How long will the term of this bond be if you require a 6% return?(Round to nearest year) 4. You Inc. is issuing bonds with the following terms: $1000 face value, 10% coupon rate, and a market discount rate of 8%. If it is priced at $1225.16, how long should You’s bond term last until maturity? 5. You are considering buying a 15 year semi-annual bond with a $1000 face value, 12% coupon rate, and a price of $790. What rate of rate of return will this bond give you? 6.
Background image of page 1

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

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

This note was uploaded on 10/23/2011 for the course BUS M 301 taught by Professor Jimbrau during the Fall '11 term at BYU.

Page1 / 3

Chapter 6b - Chapter 6b 1. Calculate the value of a bond...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online