A.
Bond valuation.
Callaghan Motors' bonds have 21 years remaining to maturity.
Interest is paid annually, they have a $1,000 par value, the coupon
interest rate is 9%, and the yield to maturity is 6%. What is the
bond's current market price? Round your answer to the nearest
cent.
B.
Bond returns
Last year, Joan purchased a $1,000 face value corporate bond
with an 12% annual coupon rate and a 25-year maturity. At the time
of the purchase, it had an expected yield to maturity of 13.2%. If
Joan sold the bond today for $921.2, what rate of return would she
have earned for the past year? Round your answer to two decimal
places.
?%
C.
Bond valuation
Bond X is noncallable and has 20 years to maturity, a 11% annual
coupon, and a $1,000 par value. Your required return on Bond X is
8%; and if you buy it, you plan to hold it for 5 years. You (and
the market) have expectations that in 5, years the yield to
maturity on a 15-year bond with similar risk will be 8.5%. How much
should you be willing to pay for Bond X today? (Hint: You will need
to know how much the bond will be worth at the end of 5 years.)
Round your answer to the nearest cent.
$?
D.
Bond valuation
Nungesser Corporation's outstanding bonds have a $1,000 par
value, a 6% semiannual coupon, 17 years to maturity, and an 7.5%
YTM. What is the bond's price? Round your answer to the nearest
cent.
?$
A. Bond valuation. Callaghan Motors' bonds have 21 years remaining to maturity. Interest is paid annually, they have a $
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