Question 1 The Barclay Corporation issued a new series of bonds on January 1, 1999. The bonds were sold at par, have a 1

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Question 1 The Barclay Corporation Issued A New Series Of Bonds On January 1 1999 The Bonds Were Sold At Par Have A 1 1 (19.27 KiB) Viewed 8 times

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Question 1 The Barclay Corporation issued a new series of bonds on January 1, 1999. The bonds were sold at par, have a 10% coupon, and mature in 30 years, on December 31, 2029. Coupon payments are made semi- annually. Mr. Jones purchased bonds, at par, in the value of $20,000. Required: a) What was the YTM on Barclay bonds on January 1, 1999? (No calculations necessary) b) If Mr. Jones wants to sell his bonds on January 1, 2004, 5 years later, what would be the price of the bond, assuming that the level of interest rates on the market had fallen to 8%? c) On January 1, 2007 (8 years later), the bonds sold for $19,050. What was the YTM at that date? Question 2 Willamson Inc.'s bonds have a coupon rate of 12% and a par value of $1,000. The 20-year bonds, were issued 5 years ago, and pays interest semi-annually. If Williamson's bonds are currently selling for $1,430, calculate their yield to maturity (YTM).