Question

Assignment 07- Bonds and Their Valuation The following bond list is from the business section of a newspaper on January 1, 2016. Notice that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon-the coupon rate is in the column labelled Coupon. The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the bond's spread above the relevant U.S. Treasury benchmark, given as a peroentage. UST indicates which U.S Treasury security maturity is the relavant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Prices are stated relative to a par value of $100. Fill in the nominal YTM for Pickman Inc.'s bonds Last UST EST Volume Coupon Maturity Price Last YieldSpread (Years) (1000s) Company Schubert inc. Chapman Inc. Rust Inc. Murphy & Co. Pickman Inc. 8.13% 01-01-2026 S82.25 9.63% 01-01-2046 $80 48 4.50% 01-01-2021 95.18 5.38% 01-01-2021 *101.02 7.75% 01-01-2026 93.11 6.20 7.15 1.37 0.89 3.89 72,070 65,275 59,277 7 465 56,305 12.05% 5.62% 5.14% 30 10 f chapman Inc. wants to issue new 30-year bonds today, what coupon rate would the bonds have to pay to be issued at par? 11.65% О 12.05% 10, 1536 12.58% Which bond is trading at a premium A-Z Schubert Inc O Rust Inc O chapman Inc. O Murphy & Co. AM 5:12 3/212019 a EN

Answer 1

The solution to the given question is provided below:

1.
=RATE(10*2,7.75%*100/2,-93.11,100)*2=8.8002%

2.
12.05%

3.
Murphy & Co.