IBM BOND HAS 20 YEARS TO MATURITY, COUPON IS 7%, ANNUAL PAYMENT, PAR IS 1000. IF YOUR REQU RATE OF RETURN IS 8%, WHAT PRICE WOULD YOU BE WILLING TO PAY FOR THIS? **PLEASE USE EXCEL**
IBM BOND HAS 20 YEARS TO MATURITY, COUPON IS 7%, ANNUAL PAYMENT, PAR IS 1000. IF...
7. An IBM bond has 11 years until maturity, a coupon rate of 8%, a par value of $1,000 and sells for $1,150 a. If coupon payments are made semi-annually, what is the yield to maturity for the bond? b. What is the coupon yield on the bond? C. If you sell it after 1 year and interest rates have increased to 7.5%, what return do you earn?
IBM issues an 11% annual coupon rate bond that matures in 16 years. The face value is $1000. The required rate of return on bonds of similar risk and maturity is 9%. 1. Is this IBM bond selling at a premium, at par or at a discount and explain why? 2. What is the price of this bond and show how? 3. Coupon payments are made monthly. What is the price of THIS bond and show how you got your...
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 11%; 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 12%. How much should you be willing to pay for Bond X today? (Hint: You will need...
Bond X is noncallable and has 20 years to maturity, a 7% annual coupon, and a $1,000 par value. Your required return on Bond X is 12%; 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 10.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to...
1) IBM has outstanding bonds with 8% annual coupon rate, that pays interest semiannually. Par value of these bonds are $1,000 and they were issued 7 years ago, at the time, with a 30-year maturity (remember that N is the time-to-maturity). a) If similar bonds have 9% return, how much would you be willing to pay for this bond? b) If the bond is currently selling for $950, what would your annual Yield-to-Maturity be if you were to buy it...
Bond valuation Bond X is noncallable and has 20 years to maturity, a 8% 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%. How much should you be willing to pay for Bond X today? (Hint: You...
Bond X is noncallable and has 20 years to maturity, a 10% annual coupon, and a $1,000 par value. Your required return on Bond X is 9%; 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%. How much should you be willing to pay for Bond X today? (Hint: You will need to...
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 10%; 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 7%. How much should you be willing to pay for Bond X today? (Hint: You will...
A three-year maturity bond with a 12% annual coupon rate is currently traded at par $1000 per bond. If you purchased it at that price today, and reinvest all the coupons until maturity what would your average annual expected rate of return be over the next three years?
Bond X is noncallable and has 20 years to maturity, a 10% annual coupon, and a $1,000 par value. Your required return on Bond X is 11%; 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 9.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to...