Please Show work I'm getting the wrong answer in excel according to the answer solution in back of the book.

1. Zetia Corporation sold a 25-year, 12% annual coupon bond at a par value of $1,000 in April 2007. In April 2017, the bond's yield to maturity (YTM) is 10%. What is the value or Present Value or V_{b }of the bond?

Present Value = pv(rate, nper,pmt,fv)

2. Now assume the same bond as above but with semiannual interest payments. What is the value or (PV) or (V_{b}) of the bond.

Present Value = pv(rate, nper,pmt,fv)

3. Yield to Maturity — you are offered a 20 year, 6% annual coupon bond with a face or par value of $1,000 at a price, today, of $1,088.75. What rate of interest would you earn if you bought the bond and held it until maturity? That is, what is the YTM?

4. Yield to Call — Five years ago, Wyatt Corporation sold a 25-year bond issue with a 12% annual coupon rate and an 6% call premium. TODAY, they called the bonds. The bonds were originally sold at their face or par value of $1,000. Compute the realized rate of return, I/Y, for an investor who purchased the bond WHEN it was issued and who surrenders it today at the CALL price.

5. Yield to Maturity — you just purchased a bond which matures in eight years. The bond has a face value of $1,000 and a 6.25% annual coupon rate. The bond has a Current Yield of 7.29%. What is the YTM?

6. On April 1, 2017, you will consider the purchase of an outstanding bond that was issued on April 1, 2015. It has a 9.5% annual coupon, paid semiannually, and has a 30 year original maturity, that is, matures March 31, 2045. There are five years of call protection, through March 31, 2020, at which time it can be called in at 110%. Interest rates have declined since it was issued, and it is now selling for 115.875% of its par value of $1,000.

What is the nominal YTM on this semiannual, 9.5% coupon bond? Show work 5 points

7.What is the nominal YTC on this semiannual, 9.5% coupon bond? Show work 5 points

8.If you decide to purchase the bond April 1, 2017, which return would you expect to earn, the YTM or YTC? Why?? 3 points

9.What is the current yield, _________%, and is it a capital gain or capital loss. Circle gain or loss. Show work.

#### Top Answer

1. Zetia Corporation sold a 25-year, 12% annual coupon bond at a par value of $1,000 in April 2007. In April 2017,... View the full answer

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- reesescup
- Apr 04, 2018 at 6:21pm