P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...

Question

Question

P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...

P7-3 Bond Prices [LO2]

Staind, Inc., has 7 percent coupon bonds on the market that have 10 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

Multiple Choice

$915.23
$828.06
$1,144.47
$1,030.00
$871.65

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Annual coupon=1000*7%=70

Hence current price=Annual coupon*Present value of annuity factor(9%,10)+$1000*Present value of discounting factor(9%,10)
=70*6.417657701+$1000*0.422410806

=$871.65(Approx).

NOTE:

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

=70[1-(1.09)^-10]/0.09

=70*6.417657701

2.Present value of discounting factor=1000/1.09^10

=1000*0.422410806

Add a comment

Answer 2

Similar Homework Help Questions

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
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 6 years left to...

Staind, Inc., has 8 percent coupon bonds on the market that have 6 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price? O $1,030.00 O $912.89 O $867.25 O $958.54 O $1,096.46

Bond James Bond Corporation has 7 percent coupon bonds that have 9 years left to maturity....

Bond James Bond Corporation has 7 percent coupon bonds that have 9 years left to maturity. The bonds make annual payments to their holders. The YTM on these bonds is 10 percent. Calculate the current price for each of the Bond James Bond Corporation's bonds. rev: 09_18_2012 Multiple Choice $1,199.46 $868.59 $827.23 $1,030.00 $785.87
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?
Staind, Inc, has 7 percent coupon bonds on the market that have 8 years left to maturity.

Staind, Inc, has 7 percent coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price? $794.16 $1,03000 $754.45 $1,242.85 $833.86

P7-5 Coupon Rates [LO2] Kiss the Sky Enterprises has bonds on the market making annual payments,...

P7-5 Coupon Rates [LO2] Kiss the Sky Enterprises has bonds on the market making annual payments, with 19 years to maturity, and selling for $840. At this price, the bonds yield 7.9 percent. What must the coupon rate be on the bonds? rev: 09_18_2012 Multiple Choice 12.49% 6.25% 7.44% 7.90% 6.35%
LO 2 3. Bond P 3. Bond Prices. Lycan, Inc., has 7 percent coupon bonds on the market that have 9 years left to m...

LO 2 3. Bond P 3. Bond Prices. Lycan, Inc., has 7 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 8.4 percent, what is the current bond price? end of $3.65 per vidend by 5.1 percent LO 1 dividend yielu. W t 10 Stock Values. Take Time Corporation will pay a dividend of $3 share next...
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?

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

Vulcan, Inc., has 7.1 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 9.1 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

P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...

Homework Answers

Add Answer to:
P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...

Post as a guest

Earn Coins

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 5 years left to...

Staind, Inc., has 8 percent coupon bonds on the market that have 6 years left to...

Bond James Bond Corporation has 7 percent coupon bonds that have 9 years left to maturity....

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 8 years left to maturity.

P7-5 Coupon Rates [LO2] Kiss the Sky Enterprises has bonds on the market making annual payments,...

LO 2 3. Bond P 3. Bond Prices. Lycan, Inc., has 7 percent coupon bonds on the market that have 9 years left to m...

Jeffries, Inc. has 6 percent coupon bonds on the market that have 11 years left to...

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

P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...

Homework Answers

Add Answer to: P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...

Post as a guest

Earn Coins

Add Answer to:
P7-3 Bond Prices [LO2] Staind, Inc., has 7 percent coupon bonds on the market that have...