Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019 and the bonds have a par value of $2,000. What price would you expect to pay for the Kenny Corp. bond? What is the bond’s current yield? You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019 and the bonds have a par value of $2,000. Last Price 94.243 29 Company (Ticker) Coupon Xenon, Inc. (XIC) 6.000 Kenny Corp. (KCC) 7.180 Williams Co. (WICO) ?? Maturity Jan 15, 2029 Jan 15, 2028 Jan 15, 2035 Last Yield . ?? 5.26 EST $ Vol (000's) 57,368 48,947 43,808 ?? 94.795 6.96 a. What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the bond's current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. b. Price Current yield

Answer 1

fx =PV(C9,C7,C5,C2)*-1 C12 А В C 1 Face value (FV) $ 2 100 7.18% 2 Coupon rate 3 Number of compounding periods per year 5 4 1*2/3 Interest per period (PMT) $ 7.18 5 Number of years to maturity Number of compounding periods till maturity 6 3*5 (NPER) 6 7 7 Market rate of return/Required rate of return Market rate of return/Required rate of return 8 7/3 per period (RATE) Bonds price 8 5.26% 9 5.26% 10 PV(RATE,NPER,PMT,FV)*-1 11 Bonds price 113.49 12 13 Current yield Bond annual coupons-Bond price 14 Current yield 6.33% 15 LC

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