Bond valuation) Fingen's 17-year, $1 comma 000par value bonds pay 13percent interest annually. The market price of the bonds is $880and the market's required yield to maturity on a comparable-risk bond is 16percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you, given your required rate of return.
c. Should you purchase the bond?
a) Bond's yield to maturity using RATE function:-
=RATE(nper,pmt,pv,fv)
=RATE(17,13%*1000,-880,1000)
=14.98%
b) Value of bond using required rate of return:-
=PV(16%,17,13%*1000,1000)
=827.54
c) No
Bond valuation) Fingen's 17-year, $1 comma 000par value bonds pay 13percent interest annually. The market price...
(Bond valuation) Fingen's 15-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $930 and the market's required yield to maturity on a comparable-risk bond is 8 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond?
(Bond valuation relationships) The 11-year, $1000 par value bonds of Waco Industries pay 9 percent interest annually. The market price of the bond is $1155, and the market's required yield to maturity on a comparable-risk bond is 8 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c. Should you purchase the bond?
(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 17-year, $1,000 par value bonds of Waco Industries pay 11 percent interest annually. The market price of the bond is $1,155, and the market's required yield to maturity on a comparable-risk bond is 8 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c. Should you purchase the bond? a....
(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 15-year, $1,000 par value bonds of Waco Industries pay 11 percent interest annually. The market price of the bond is $1,145, and the market's required yield to maturity on a comparable-risk bond is 8 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c. Should you purchase the bond? a. What is your yield to...
The 16-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $875, and the market's required yield to maturity on a comparable -risk bond is 10 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c. Should you purchase the bond?.
The 13-year, $1000 par value bonds of Waco Industries pay 6 percent interest annually. The market price of the bond is $935, and the market's required yield to maturity on a comparable-risk bond is 5 percent. a.)Compute the bond's yield to maturity. b.)Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c.)Should you purchase the bond?
The 17-year, $1,000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is $925, and the market's required yield to maturity on a comparable-risk bond is 10% percent. a. What is your yield to maturity on the Waco bonds given the current market price of the bonds? ____% b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c. Should you purchase...
The 15-year, $1000 par value bonds of Waco Industries pay 6 percent interest annually. The market price of the bond is $1095, and the market's required yield to maturity on a comparable-risk bond is 4 percent. a. Compute the bond's yield to maturity. (round to 2 decimal points) b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. (round to the nearest cent) c. Should you purchase the bond?
Smith’s 17-year, $1,000 par value bonds pay 14 interest annually. The market price of the bonds is $950 and the market's required yield to maturity on a comparable-risk bond is 16 percent. a. What is your yield to maturity on the Smith bonds given the market price of the bonds? b. What should be the value of the Smith bonds given your required rate of return on a comparable-bond? c. You should or should not purchase the Smith bonds because...
The 12-year, $1,000 par value bonds of Waco Industries pay 9 percent interest annually. The market price of the bond is $1,055, and the market's required yield to maturity on a comparable-risk bond is 7 percent. a. What is your yield to maturity on the Waco bonds given the current market price of the bond____%? b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond_____? c. Should you purchase the...