HW2 - face value If the price of the bond is $850 what is...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Homework #2 BUS241 Bonds Note: Assume that all of these bonds pay semi-annually. Use 365 days per year to calculate each maturity date. 1. MCD has issued bonds with 15 years to maturity, a 6% coupon rate, and $1,000 face value. If your required rate of return is 8% and the bonds pay semi-annually, what is the price of these bonds? 2. HP has issued bonds with 10 years to maturity, a 15% coupon rate, and $1,000
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: face value. If the price of the bond is $850, what is the yield-to-maturity? 3. What is the current yield on these 10-year HP bonds? 4. What is the yield-to-call if the bonds can be called in 5 years at a call premium of $1,200? 5. Given the above information, which bond do you expect would have a lower rating, MCD or HP?...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online