1. A few years ago, Spider Web, Inc. issued bonds with a 12.03 percent annual co
ID: 2713210 • Letter: 1
Question
1.
A few years ago, Spider Web, Inc. issued bonds with a 12.03 percent annual coupon rate, paid semiannually. The bonds have a par value of $1,000, a current price of $1,079, and will mature in 20 years. What would the annual yield to maturity be on the bond if you purchased the bond today?
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
You should use Excel or financial calculator.
2.
Bright Sun, Inc. sold an issue of 30-year $1,000 par value bonds to the public. The bonds had a 11.58 percent coupon rate and paid interest annually. It is now 7 years later. The current market rate of interest on the Bright Sun bonds is 8.26 percent. What is the current market price (intrinsic value) of the bonds?
Round the answer to two decimal places.
3.
Assume that today's date is February 15, 2015. Robin Hood Inc. bond is an annual-coupon bond. Par value of the bond is $1,000. How much you will pay for the bond if you purchased the bond today? The answer should be calculated to two decimal places
Company
Price
Coupon Rate
Maturity Date
YTM
Current Yield
Rating
Robin Hood
108.594
11.431
2-15- 2032
-
-
D
Company
Price
Coupon Rate
Maturity Date
YTM
Current Yield
Rating
Robin Hood
108.594
11.431
2-15- 2032
-
-
D
Explanation / Answer
1)
2)
Face value (FV) $ 1,000.00 Coupon rate 12.03% Number of compounding periods per year 2 Interest per period (PMT) 60.15 Bond price (PV) $ (1,079.00) Number of years to maturity 20 Number of compounding periods till maturity (NPER) 40 Bond Yield to maturity RATE(NPER,PMT,PV,FV)*2 Bond Yield to maturity 11.04%Related Questions
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