Vulcan, Inc., has 7.1 percent coupon bonds on the market that have 9 years left to...

Question

Question

Vulcan, Inc., has 7.1 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments a

business finance

Answer 1

Answer #1

Annual coupon=1000*7.1%=71

Hence current price=Annual coupon*Present value of annuity factor(9.1%,9)+$1000*Present value of discounting factor(9.1%,9)

=71*5.97095096+1000*0.456643463

=$880.58(Approx).

NOTE:

1.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=71[1-(1.091)^-9]/0.091

=71*5.97095096

2.Present value of discounting factor=1000/1.091^9

=1000*0.456643463

Answer 2

Similar Homework Help Questions

Vulcan, Inc., has 7.7 percent coupon bonds on the market that have 10 years left to...

Vulcan, Inc., has 7.7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.7 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price
Vulcan, Inc., has 7.8 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual paym...

Vulcan, Inc., has 7.8 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.8 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price
Vulcan inc.

Vulcan, Inc., has 7.3 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.3 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price

The Petit Chef Co. has 11 percent coupon bonds on the market with nine years left...

The Petit Chef Co. has 11 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,139.59, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to...

Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price?
Jeffries, Inc. has 6 percent coupon bonds on the market that have 11 years left to...

Jeffries, Inc. has 6 percent coupon bonds on the market that have 11 years left to maturity. Th bonds make annual payments. If the YTM on these bonds is 7.4 percent, what is the current bond price?

Aloha Inc. has 4.1 percent coupon bonds on the market that have 9 years left to...

Aloha Inc. has 4.1 percent coupon bonds on the market that have 9 years left to maturity. If the YTM on these bonds is 7.5 percent, what is the current bond price? The bond pays coupons twice a year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Staind, Inc., has 8 percent coupon bonds on the market that have 5 years left to...

Staind, Inc., has 8 percent coupon bonds on the market that have 5 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price? rev: $889.12 $933.58 $1,030.00 $844.67 $1,123.78
Staind, Inc., has 8 percent coupon bonds on the market that have 14 years left to...

Staind, Inc., has 8 percent coupon bonds on the market that have 14 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 9 percent, what is the current bond price? rev: 09_18_2012 $1,030.00 $922.14 $1,086.44 $876.03 $968.25

Bart Software has 9 percent coupon bonds on the market with 25 years to maturity. The...

Bart Software has 9 percent coupon bonds on the market with 25 years to maturity. The bonds make semiannual payments and currently sell for 111.75 percent of par. a. What is the current yield on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)...