FLO (2) - 4092 208.06 229.58 5739.6 775.99 646.85 129.14...

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P3 face value 1000 Coupon rate 5.70% Market price 97.708 YTM 6.03% A Dollar price 977.08 B Bond current yield 5.83% C Bond is selling at discount, as the market price is lower than the par value. D P2 Face value 1000 Coupon rate 12% year to maturity 16 Market yield 10% A PV of interest payment $938.85 PV of principal payment $217.63 Market price of bond today $1,156.47 B The two reason can be C P3 Part A Dividend last year 1.2 Growth 5% Market price 28 Dividend next year 1.26 Required return 9.50% Part B Dividend last year 1.2 Growth 10% Market price 28 16500 Dividend next year 1.32 -400 Required return 14.71% 1000 1000 16100 1110 1140 15778 1018.349 1045.872 23920 322 18.34862 45.87156 37047 98 4802 6500 6435 65 14870 7155 32165 -43.25 7198.25 48011 5947.66 6820 5739.6
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Unformatted text preview: 4092 208.06 229.58 5739.6 775.99 646.85 129.14 4225.78 4238.69 12.91 28919.41 34867.07 The current yield is lower than the YTM, as the current yield doesnt consider the capital gain arising due to the market price lower than the par value. The other bond is issued late then compex systems bond, as the market interest has declined after that Other company bond provides more restrictive covenant or protection to the bond holder as compared to Complex System bond In case the required return in 12%, then the bond price would be 1000. As in this case the required return Is equal to the bond coupon payment...
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This note was uploaded on 12/04/2011 for the course ECONOMICS 201 taught by Professor Rcollier during the Spring '10 term at Portland CC.

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